Education loan and postgraduate loan payment guidance for companies

Arrange and loan kinds and thresholds

With impact from April 2020, the thresholds in making education loan deductions are:

  • Arrange 1 – ВЈ19,390 annually (ВЈ1,615.83 a thirty days or ВЈ372.88 per week)
  • Plan 2 – ВЈ26,575 annually (ВЈ2,214.58 an or ВЈ511.05 a week month)
  • Workers repay 9% associated with quantity they make throughout the threshold for Arrange 1 and 2.

    Workers repay 6% of this quantity they make throughout the threshold for PGL .

    Beginning education loan and PGL deductions, checking plan and loan type

  • Your employee’s that are new programs deductions should continue – ask your employee to ensure their plan and loan kind
  • Your employee that is new tells they’re repaying a student loan – ask your worker to verify their plan and page loan type
  • your brand-new worker fills in a beginner list showing they will have a student loan – the checklist should let you know which plan type and loan kind to utilize, in the event the worker has both plan kind 1 and 2, inquire further to check on with all the education loan business for the correct plan type to just just take deductions under otherwise, default to prepare type 1 unless you get an educatonal loan start notice SL1 that HMRC provides you with
  • HMRC delivers you form SL1 ‘Start Notice’ – this will say to you which prepare kind to make use of
  • HMRC delivers you form PGL1 ‘Start Notice’ – this may let you know they will have a PGL
  • you will get a Generic Notification Service education loan and, or PGL reminder – ask your worker to ensure their plan and loan type
  • If you’re running ‘Off Payroll’, stick to the guidance Off-payroll working.

    In the event the employee will not understand which plan or loan type they’re on, inquire further to visit Repaying your education loan. Until you receive further instructions from HMRC if they’re still unable to confirm their plan or loan type, start making deductions using Plan type 1. Defaulting to Arrange 1 is readily available for Arrange 1 or Arrange 2 loans.

    When your employee believes they will have overpaid their deductions they need to contact Student Loan Company (SLC ) – payment enquiries.

    After they have started to work for you, and they did not tell you, or indicate on their starter information they were a student loan borrower, or there is a gap since their last employment, you should ask them to confirm their plan or loan type if you receive an employee’s P45.

    You need to begin making deductions through the next payday.

    If for example the employee will not understand their plan or loan kind they ought to head to Repaying your education loan.

    Don’t make any deductions in arrears.

    Where a brand new worker fills in an expat beginner checklist or indicates in the beginner declaration list which specifies education loan and PGL deductions use, you need to start making these deductions through the payday that is next.

    You need to just use an expat beginner checklist where workers have now been seconded to your workplace in britain while remaining employed by the employer that is overseas. Find more details into the help guide to PAYE and National Insurance contributions.

    Generic Notification Service (GNS ) messages

    HMRC will be sending 4 kinds of education loan or postgraduate loan GNS reminders.

    One is just a reminder to begin deductions where:

    The second reason is a reminder which will make deductions with the plan that is correct where:

    If you’re paying an work-related pension as opposed to an income, you should ignore any pupil loan GNS message.

    For employments susceptible to the off-payroll rules that are working April 2020, only refund the education loan as well as PGL deductions extracted from payments susceptible to the off-payroll working guidelines only.

    You will get these reminders as GNS communications to your web PAYE account. HMRC recommends that you create e-mail alerts of these reminders and might contact you to definitely ensure that the proper deductions begin.