Over-collection of student loans hit the press with some ferocity last month adding salt to the very sore wound that many of our graduates now have.
Latest figures out (for tax year 2015/16) show £51 million of payments had been over-collected in just a single year. Neither HMRC nor the Student Loan Company appear to be doing anything to improve the situation.
Despite the fact that real-time reporting to HMRC has been with us for over four years, HMRC only report payments made by graduates to the student loan company once a year and sometimes as long as seven months after the year has finished.
To add insult to injury, interest is not due on over-payments until you have been informed of the overpayment and then only for a period of 60 days.
Our advice is that if an employee comes to you saying that they have fully repaid their student loan and they have the evidence to prove it, stop the deduction. It simply isn’t fair to keep taking money from employees when they have fully discharged their liability.
This is yet another example of “real time information” being provided in by employers and “historical, look at it when we feel like looking at it” response from government agencies.
HMRC and the Student Loan Company should be held accountable for this and should sort it out.