Student loan repayments - divident

[cannon999]

Do I have to take divident income into account when considering the student loan repayments?

There is a lot of confusion around this. My accountant tells me that only salary comes into it and divident doesn't count. Another contractor that I know doesn't count the divident towards his student loans.

However a lot of information online as well as from other accounting websites seems to indicate that both salary and divident are used to calculate student loan repayments.

At the same time CSLM17055 - Collection of Student Loans Manual - HMRC internal manual - GOV.UK

This link seems to indicate that again dividents are not included as earnings?

Does anyone have experience with this please?

Thank you

[northernladuk]

student loan site:forums.contractoruk.com - Bing

Some pretty old threads but should be covered in that list somewhere.

In fact this one looks remarkably similar.

https://www.contractoruk.com/forums/...oan-query.html

[Alchemy Accountancy]

You will pay student loan repayments on your dividend income.

On your self-assessment tax return you will need to state that you are liable to make student loan repayments, and the amount payable will be calculated for you.

[cannon999]

You will pay student loan repayments on your dividend income.

On your self-assessment tax return you will need to state that you are liable to make student loan repayments, and the amount payable will be calculated for you.

Can you make a comment on this please?

CSLM17055 - Collection of Student Loans Manual - HMRC internal manual - GOV.UK

[northernladuk]

I'd assume where it says no to dividends its assume low amounts a normal person would hold, not the amounts we use that make up most of our income.

[cannon999]

I'd assume where it says no to dividends its assume low amounts a normal person would hold, not the amounts we use that make up most of our income.

I have read that article. I have also read a dozen of others. The information that I am finding is conflicting!

I guess what I am looking for here is for other people in similar circumstances to say what they are ACTUALLY doing.

[Alchemy Accountancy]

Can you make a comment on this please?

CSLM17055 - Collection of Student Loans Manual - HMRC internal manual - GOV.UK

The section of the 'Collection of Student Loan Manual' (CSLM) that you are looking at is for borrowers within PAYE, which doesn't apply to these circumstances. You need to look at section 19000 of the same manual.

CSLM19025 - Collection of Student Loans Manual - HMRC internal manual - GOV.UK states "However additional liability under SA may arise if...The borrower has other income, such as self employed profits or unearned income in excess of £2,000". Dividends are unearned income.

[cannon999]

The section of the 'Collection of Student Loan Manual' (CSLM) that you are looking at is for borrowers within PAYE, which doesn't apply to these circumstances. You need to look at section 19000 of the same manual.

CSLM19025 - Collection of Student Loans Manual - HMRC internal manual - GOV.UK states "However additional liability under SA may arise if...The borrower has other income, such as self employed profits or unearned income in excess of £2,000". Dividends are unearned income.

I see. Thank you.

[TheCyclingProgrammer]

Firstly it's dividend, not divident and secondly yes dividend payments do count when calculating your loan repayments. I know this because I do my wife's tax return and every year her combined salary + dividends take her over the repayment threshold and she has to make a payment via self assessment.

[Maslins]

Dividends do indeed count. I imagine the confusion is that HMRC find out about dividends/salary in very different ways.

Salary is submitted monthly. Payroll makes no mention of dividends. Therefore if you're a typical contractor taking a salary of £702/month, even if you also get £100k/year in dividends, there will be no student loan deductions on a monthly basis via the payroll.

Independently of that you'll need to do a personal tax return. This will disclose all salary received and student loan contributions already paid (likely £nil), plus dividends received. The total income will then dictate what student loan repayments are required, and you can offset any already suffered via the payroll system (again likely £nil for a typical contractor).