What happens to your UK student loan when you move back: PAYE restarting, fixing overseas gaps, arrears clean-up, HMRC data lags, and how to re-enter the system on your terms instead of theirs.
You have done the expat cycle: overseas contracts, local payrolls, tax treaties, foreign currencies. Now you are coming back. The UK system does not treat you as a blank slate. HMRC, SLC, and your lenders will eventually connect the dots. You either control that process or wait for letters to dictate it.
While you were abroad you were either in the Overseas Income Assessment system – paying SLC directly – or you ignored it and let a backlog quietly build. Coming back changes two things: you re-enter UK PAYE and you re-enter the UK credit ecosystem. Both make your student loan visible again in a way it might not have been while you were away.
When you start a UK job above the repayment threshold, PAYE deductions will eventually restart. "Eventually" is the point – there is a lag between you starting work, HMRC processing the data, and SLC adjusting your record. If you have arrears from your time abroad, that lag is exactly when you fix them, before the system comes knocking on its own.
This guide explains what to do as soon as you know you are coming back, how to tell SLC, how PAYE re-engages, how to handle overseas gaps, what to do if you have ignored assessments for years, how side income and Self Assessment fit in, and how to build a 12-month plan that results in a boring, predictable loan instead of a delayed mess.
Do not wait for SLC to discover you through HMRC records. You moved; you tell them. That one action shifts the dynamic from "non-compliant overseas borrower" to "returning borrower who is engaging". You want that framing when they review your history.
This is not a negotiation. It is you updating reality on their system before they discover it indirectly. You are closing the gap between your life and their data, which is where most problems live.
When you were overseas with no UK PAYE, SLC either had you on an Overseas Income Assessment or – if you didn’t engage – on a non-compliant fixed repayment schedule you probably ignored. Back in the UK, the target state is simple: PAYE handles repayments automatically via your employer for as long as you are above the threshold.
If you ignored overseas assessments, SLC may have:
Coming back does not magically wipe this. But voluntarily moving into PAYE, facing the arrears and agreeing a clean-up plan is always better than pretending the overseas period never happened.
The goal: a single, predictable repayment route. Long term that is PAYE. Direct debits and firefighting should be temporary tools, not permanent structures.
The first UK tax year after you return is messy by design. HMRC, SLC, your old overseas period, and your new UK income all overlap. If you expect clean precision, you will be disappointed. Treat it as a transition year and manage the moving parts deliberately.
The system is not perfect and never will be. You compensate by watching your first-year payslips and closing gaps yourself instead of acting surprised 18 months later.
If you handled overseas assessments correctly, this section is short: there are no arrears to fix. If you didn’t, this is where you stop pretending and do the clean-up. You either deal with arrears while re-entering the system or drag them behind you for years.
You are not going to bluff your way out of missing years. The only question is whether you fix them while you still have control over pace and terms, or after a formal collections team sets the pace for you.
Back in the UK you might not go straight into a simple PAYE-only job. You might freelance, do contract work, run a small business, or stack multiple part-time roles. HMRC will want you on Self Assessment. SLC will want their cut of any income above the threshold across all streams.
New pattern: stop separating "tax" and "loan" emotionally. Treat them all as automatic slices of profit that never belonged to you in the first place. What is left is what you can actually spend.
While overseas you probably paid fixed monthly amounts by direct debit, set by SLC based on the Overseas Income Assessment. Back in the UK, the logic changes: repayment is purely threshold-based via payroll. You stop trying to match a fixed amount and let the PAYE percentage do the work.
Under PAYE, your repayment is:
That means your repayment is a moving slice of your income, not a fixed bill. Better aligned with reality, but also easier to ignore until you see the payslip. Look at the payslip.
When you come back you will eventually want normal UK things: a rental without a guarantor, a car on finance, a mortgage, maybe a business loan. Lenders care less that you went abroad and more about whether you can handle obligations without chaos. Your student loan history is part of that story.
If you want future underwriters to treat you as low friction, your job now is simple: get on top of the student loan, document the turnaround, and keep it boring from here on.
You do not fix years of messy overseas behaviour in one phone call. You fix it with a short, brutal 12-month reset. One year of clean behaviour beats five years of drift.
Re-enter PAYE cleanly, fix the overseas mess, and turn the loan back into a predictable background script instead of an unresolved storyline.
UK Education Policy Specialist
With over 15 years of experience in UK education policy and student finance, Dr. Sharma founded Student Loan Calculator UK to help students navigate the complex world of student loans.