More Information about Repaying through Your Salary
The role played by your employer
The Student Loans Company will advise HM Revenue and Customs (HMRC) (formerly the Inland Revenue) when you are due to begin repayment. If you work as an employee and pay tax and National Insurance through the Pay As You Earn (PAYE) Scheme, your employer will calculate and deduct Student Loan repayments due each pay period, based on your earnings for that period.
At the end of the tax year your employer will advise HMRC of your deductions. They will then send these details on to the Student Loans Company. You should therefore be aware that HMRC and the Student Loans Company will only be informed of your total repayments at the end of each financial year.
Note: The joint administration of the scheme by SLC and HMRC means that no information regarding repayments, balances and collection will be passed between SLC and HMRC other than the designated repayment information transfers.
How your employer knows what to do
HMRC will issue all employers with a briefing pack each January which explains how to calculate your deductions. They will also advise your employer when deductions should start and stop. If your employer has any queries in this regard they should contact the HMRC helpline on 0845 7143 143.
From April 2006 you will have the facility on your P46 Form to instruct your employer to commence deductions. You can download this form here (43.5kb)
Please note that the Student Loans Company will not discuss details of your loan with your employer, even if he or she is calling on your behalf. If you have any queries about PAYE or Self Assessment deductions please contact your local tax office, details of which can be found in the yellow pages under Government Offices. You can also obtain further information on the HMRC website.
If you change employer
If you are already making student loan repayments, your new employer will continue to make deductions. Your old employer will give you a P45 and this will show that you are a student loan account holder. You should keep parts 2 and 3 of your P45 safe until you start your new job, and keep part 1A for your own records. When you start your new job, you should pass your new employer parts 2 and 3 of your P45. They will send part 3 of your P45 to HMRC to confirm that you have started a new job, and student loan deductions will be made from your first salary, providing that your income exceeds the threshold.
If you are subject to both PAYE and Self Assessment
If you work as an employee, but are also self employed, are subject to tax at a higher rate or have unearned income from stocks, shares and savings etc., you will be required to calculate any Student Loan repayments due through Self Assessment in addition to any repayments which are deducted through PAYE.
Records to keep
You must retain your wage slips and your P60 form, which is given to you at the end of each tax year by your employer. You should also keep your P45 and / or P46 if you have them. You will need these if you wish us to calculate your balance in between statements.
When repayments are due to end
If you would like to estimate when you will finish repaying your student loans, particularly if your annual statement indicates that it is likely to be in the current financial year, the Student Loans Company can predict when you are expected to complete repayment. We can also advise HMRC to stop making deductions.
Please write to us at
Student Loans Company Ltd.
100 Bothwell Street
Glasgow
G2 7JD
enclosing your relevant P60s (if available) as well as all wage slips for the tax year, and the calculation will be made for you.
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