What is the Repayment of Teachers Loan Scheme?

Student Loans are part of the government’s financial support package for students in higher education in the UK. They are available to help students meet their expenses while they are studying, and it is HMRC’s responsibility to collect repayments where the borrower is working in the UK.

The Student Loans Company (SLC) is directly responsible for collecting the loans of borrowers outside the UK tax system. Maintenance grants are also available under certain circumstances. The grants do not have to be repaid but do reduce the amount of maintenance loan a student is entitled to.

A special Repayment of Teachers Loan (RTL) Scheme was operated as a pilot for teachers beginning in the academic years 2002/03, 2003/04, 2004/05. The scheme meant that qualifying teachers were effectively not required to repay their student loans. The scheme was closed to new applicants after the academic year 2004/05.

The RTL scheme continues to be available to teachers using the scheme as long as they remain in eligible employment. The scheme works by the government meeting the tax and NICs costs on the teacher’s behalf, so the teacher gets the full value of the write-off.

Planning note for student loans

As a general rule, students that have finished their studies and entered the workforce must begin to make loan repayments from the April after they have finished their studies or when their income begins to exceed the annual threshold. The annual threshold amounts for 2018-19 is £18,330 for plan 1 and £25,000 for plan 2.

Posted in Income Tax

Exeter Accountant MJ Smith & Co

Celebrating 25 years of excellence.

Free 1st Meeting
Fixed Fees
Free Support!

Find out more

Client Portal Login

Forgot Password?

Latest News

Emails and letters from HMRC

HMRC continues to warn taxpayers about email phishing scams. Phishing emails are used by fraudsters to access recipients’ valuable personal …
Read More

Childcare voucher scheme issues

The Tax-Free Childcare Scheme (TFCS) was launched in April 2017 and opened to all remaining eligible families with children under …
Read More

Fixtures and fitting on transfer of ownership

The tax treatment of the sale of fixtures and fittings included in the sale or purchase of a commercial building …
Read More

Twitter Feed