Account holders in the UK Tax System
Those who are in the UK Tax System have their repayments deducted at source by their employers or through their self-assessed tax returns. An account holder is identified in the UK Tax System by means of the National Insurance Number (NINO) they provided when they first applied for the loan.
The Student Loans Company instructs HM Revenue & Customs (HMRC) to notify the account holder, or their employer, when the repayments are due to commence. From that point forward, the due repayments are deducted from taxable earnings, collected by HMRC and allocated to the customer’s loan account balance. When the balance is expected to be fully repaid, HMRC notifies the account holder, or their employer, that repayments should cease. Any further repayments received before the notice is acted upon are refunded.
Account holders Outside the UK Tax System
Those who are not in the UK Tax System - for example, because they live overseas and are paying their taxes in some other country - are nevertheless obliged to make due repayments. The following mechanism is used:
If an account holder is sought in the UK tax system and despite having a correct and valid NINO is not found, they are contacted for their current employment and earnings information. If this then allows them to be found in the UK Tax System, the process for UK Tax Payers is followed.
If it transpires from the enquiry that the account holder cannot be debited through earnings at source because they do not pay tax to HMRC, a form is sent asking them to document and evidence their earnings and this is returned to the Student Loans Company. We then establish the gross earnings, convert this figure to Sterling, work out the required repayment and make arrangements to collect this from the account holder. Repayments are then applied to the loan balance.
Voluntary repayments
Account holders may repay some or all of their balances voluntarily at any time. Such repayments are applied to the loan balance to reduce it. A customer who repays some of the balance voluntarily continues to have repayments collected at the statutory rate; the effect is to bring forward the date at which the loan is fully repaid and repayments cease.