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Graduates down £51m due to delays
01 August 2017
New figures obtained from the Student Loans Company under the Freedom of Information Act show the number of overpayments and amount overpaid continues to rise. The latest figures for 2015/16 show that over 86,000 graduates overpaid by an average of £592. This compares to 52,000 graduates and an average of £540 in 2009/10.
The figures, obtained by accountant RSM, show that borrowers over-repaid almost £51m on income contingent repayment (ICR) student loans through their salary deductions.
The Student Loan Company only receives information from HMRC about what graduates have repaid once a year, after employers have finalised their annual tax returns. This means there is a time lag meaning thousands of people nearing the end of their repayments overpay unless they opt for payment by direct debit. And if they do overpay RSM says they can then face further hurdles and delays in getting their over-payments refunded.
With the advent of Real Time Information for tax purposes and the forthcoming Making Tax digital it is surprising, according to RSM, that HMRC and the Student Loan Company have not yet developed a more efficient system to take the right amount of money!
There is an obvious irony here in that employers are required under threat of penalties to report to HMRC in real time, but there is no corresponding duty on HMRC to report each repayment to the loan company. RSM felt there is a sense of double standards, which results in some borrowers having to jump through numerous hoops or fact a lengthy wait to receive a refund.
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