31st August 2016
HMRC have issued updated guidance to employers on how to deal with student loan deductions via the PAYE system.
Employers should familiarise themselves with the guidance which has been updated to reflect the introduction of plan 2 loans which are repayable from a different threshold but at the same nine percent basis.
With effect from the 2016/17 tax year there are two plan types for student loan repayments:
The updated guidance includes the following advice on identifying the plan type:
‘Start making student loan deductions from the next available payday using the correct plan type if any of the following apply:
If your employee doesn’t know which plan type they’re on, ask them to contact the Student Loan Company (SLC). If they’re still unable to confirm their plan type, start making deductions using plan type 1 until you receive further instructions from HMRC.’
If you would like any advice or help with payroll matters please get in touch.
Internet link: Guidance