What happens to my student loan if I become self employed?
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How are student loan repayments calculated? I am thinking about starting my own company in 2011.
rsmith1
1 year ago
Expert Financial Adviser Answer
James Brooke
answered 1 year ago
The Student Loans Company (SLC) will work with HM Revenue and Customs to collect repayments. Repayments are not over a fixed period, but the level of repayments will rise and fall in line with your income.
If you are self-employed, HM Revenue and Customs will collect your loan repayments through the self-assessment system, along with your tax. Your liability will be assessed on all your self-employed income as well as any PAYE income you may also have.
If you are an employee, your employer will take repayments from your pay, at the same time as they take tax and National Insurance contributions. Your employer will work out your payments based on your individual pay periods and not on your total income for a whole year. The repayments will be shown on your wage slip.
If you live outside the UK or are working abroad for a non-UK employer, you will have to tell SLC about this and you will have to make monthly payments direct to SLC. SLC will make alternative arrangements to collect repayments direct from borrowers who are outside the UK tax system.
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If you are self-employed, HM Revenue and Customs will collect your loan repayments through the self-assessment system, along with your tax. Your liability will be assessed on all your self-employed income as well as any PAYE income you may also have.
If you are an employee, your employer will take repayments from your pay, at the same time as they take tax and National Insurance contributions. Your employer will work out your payments based on your individual pay periods and not on your total income for a whole year. The repayments will be shown on your wage slip.
If you live outside the UK or are working abroad for a non-UK employer, you will have to tell SLC about this and you will have to make monthly payments direct to SLC. SLC will make alternative arrangements to collect repayments direct from borrowers who are outside the UK tax system.
Paulina88
answered 1 month ago
How do I repay my student loan if I am both employed (full-time) and self-employed (part-time)? I have been in full employment for a few years and have also recently (March 2012) became self-employed (working as a consultant for one company). Having 2 sources of income means that I am now slightly over the threshold (£15000). Do I have to let Student Finance England (or anybody else) know about my current circumstances?
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Expert Financial Adviser Answer
James Brooke
answered 1 month ago
Yes, you need to advise Student Finance. you will also need to let Her Majesty's Revenue and Customs (HMRC the tax people) know that you are self employed and you will need to fill in a tax return each year. if you need help with completing the tax return you could try a company like Taxfile www.taxfile.co.uk who are very used to helping self employed people like you and they are very reasonable too.
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