What happens with my student loan if I go abroad?
If you go abroad and are no longer within the UK tax system, HMRC can no longer be involved in your student loan repayments and the Student Loans Company (SLC) takes over.
If you go overseas for more than three months, you must let SLC know – their contact details and online form can be found on the SLC repayment website. The UK government is currently working with other countries in the EU to track and trace those with an outstanding student loan who may be working abroad so it is important to advise SLC before you go away.
The repayment threshold relevant to the country you are going to is not necessarily the same as the threshold in the UK (£18,330 for Plan 1 income-contingent repayment student loans for the 2018/19 tax year and £25,000 for Plan 2 income-contingent loans for the 2018/19 tax year). Thresholds vary according to comparison calculations between the cost of living in the UK and the other country. The SLC repayment website gives the thresholds for Plan 1 loans and Plan 2 loans. The SLC uses the repayment thresholds over a 12-month period from when you are working abroad, so this may differ from the UK tax year (which runs from 6 April to 5 April).
If you have been away overseas and return to the UK for three months or more, you should let SLC know. This is important because if you find employment in the UK, you might need to start making PAYE repayments again and you will need to cancel any separate arrangements that you have made direct with SLC.
If you have been abroad then return to the UK it is important to understand whether you have made overpayments on your loan. This situation can arise when you have been paying your loan repayments direct to the SLC and you are then asked by HMRC to complete a self assessment tax return. Your tax return will include all your worldwide income and your student loan repayments will be calculated on this income and so will not automatically take into account the overseas repayments you have made directly to the SLC. If you are in this position and you do not want to make overpayments then you must contact the SLC to transfer the direct overseas repayments to HMRC and then apply to HMRC for a refund.
It is recommended that you check your loan account to ensure that all repayments have been accounted for (those made through the self assessment process to HMRC and those directly paid to the SLC).
You can find out more about working abroad temporarily elsewhere on our website.