PART 3Repayments by Assessment to Income Tax

Time for and amount of repaymentsI129

1

Every borrower who has received a notice from the Authority of a requirement to make repayments of a student loan under regulation 15(3)(a) must make repayment in respect of any tax year—

a

which is specified in a notice under regulation 15(3)(a) or which, subject to paragraph (2), is any subsequent year up to and including any year specified in a notice under regulation 15(3)(d); and

b

for which the borrower has been required to make and deliver a return under section 8 of the 1970 Act.

2

A borrower will not be required to make repayments in respect of any tax year specified in a notice under regulation 15(3)(c) or any subsequent year falling before a year specified in a subsequent notice under regulation 15(3)(a).

3

The repayment must be an amount equal to 9% of the borrower’s total income for that year calculated in accordance with paragraph (4).

4

A borrower’s total income for the purposes of paragraph (3) will be calculated by identifying the borrower’s total income in accordance with step 1 of section 23 of the 2007 Act and from that total income:

a

excluding the first £15,000;

b

where a borrower is an eligible teacher in part-time eligible employment, excluding any amount of income from that employment in excess of £15,000;

c

excluding unearned income unless the amount of such income for that year exceeds £2,000;

d

excluding incapacity benefit payable under the Social Security Contributions and Benefits Act 199228;

e

excluding amounts chargeable to tax under Chapters 5, 6, 7 or 10 of Part 3 of the 2003 Act (benefits in kind);

f

excluding amounts of any reduction or repayment made under the Teachers’ Regulations;

g

excluding Employment and Support Allowance paid under the Welfare Reform Act 200729;

h

deducting the amount of any loss in respect of which relief is given under–

i

section 64 of the 2007 Act (in respect of losses in a trade, profession or vocation), or

ii

section 128 of the 2007 Act (in respect of losses in an employment); and

i

deducting the amount of any payment in respect of which relief is given under section 96 of the 2007 Act (relief for post-cessation expenditure);

j

deducting any amounts in respect of which relief is given under Part 4 Chapter 4 of the Finance Act 2004 (pension schemes etc)30 and that have not been included in the calculation of total income at step 1 of section 23 of the 2007 Act31.

5

For the purposes of this regulation, unearned income is income other than—

a

income charged under the provisions of either the 2003 Act or Part 2 of the 2005 Act except jobseeker’s allowance to which Chapter 3 of Part 10 of the 2003 Act applies; and

b

the profits of a UK furnished holiday lettings business within the meaning of section 127(2) of the 2007 Act.

6

For the purposes of this regulation, “jobseeker’s allowance” means an allowance within the meaning of Part 1 of the Jobseekers Act 199532.