CSLM19030 – SL repayments: borrowers within SA: penalties, surcharge and interest

For all practical purposes the payment of Student Loan repayments through SA, and the consequences of failure to pay, should be treated as if it were income tax. Note, however, that

• The due date is the 31 January following the end of the year of assessment
• Student Loans liability is not taken into account in computing payments on account

In determining whether penalties, surcharge or interest are appropriate follow normal SA rules. The following summarises the statutory position, which can be found in The Education (Student Loans)(Repayment) Regulations 2000.

Penalties

Penalties which have become due in respect of tax apply equally to Student Loan repayments.

References in Section 93 TMA 1970 to liability to tax shall be references to income tax, capital gains tax and Student Loan repayments.

Penalties under Sections 95 and 97 TMA 1970 shall apply to Student Loan repayments as well as tax.

Surcharge

Section 59C TMA 1970 (surcharges on unpaid income tax and capital gains tax) applies to unpaid Student Loan repayments in the same way as tax.

Interest

Interest chargeable under Section 86 TMA 1970 on overdue payment of Student Loan repayments shall apply from 31 January following the year of assessment.

Interest will become chargeable from the end of the period of three months from the date of the Section 8 notice if, exceptionally

• A notice required by Section 7 TMA 1970 is given by the borrower within six months of the end of the year of assessment

And

• A notice is not given under Section 8 TMA 1970 until after 31 October following the end of the year of assessment