as now, payroll software will deal with student loan calculations at the same time as it calculates tax and National Insurance Contributions (NICs) employers will never be asked to operate more than one plan type at a time as now, the main employer notification method will be the SL1 Start notice. Every SL1 issued will indicate which plan type should be operated when updating employee information onto payroll software, employers will have to input which plan type applies as now, employers will collect and record starter information. If the employee is repaying a student loan they will now also need to ask which plan type the employee is repaying under. More information about new employees is also available from 6 April 2016 the Starter declaration checklist will prompt employers to ask new employees about their student loan plan type form P45 will only indicate whether an employee is already repaying a student loan. It will not indicate a plan type and so employers must ask the new employee for this information. If an employee doesn’t know, the employer should adopt a Plan 1 type by default. In any event we will always send an SL1 to confirm in some cases a plan type could change in year. The notification method will be a new SL1. When a new SL1 is received showing a different plan type an employer should simply amend their payroll software for the new plan type and deductions will continue uninterrupted. In these circumstances an SL2 Stop notice will not be issued, only a new SL1.
Next steps
In the lead up to 6 April we will be issuing more detailed and permanent guidance across various publications and channels. We would ask employers to watch out for future editions of the Employer Bulletin.
CIPP response to consultation on freezing the student loan repayment threshold 9 October 2015
The CIPP has submitted their response to the government consultation on freezing the student loan repayment threshold.
The government’s consultation details 2 options:
1. keeping the loan repayment threshold at £21,000 for all students from April 2016, or; 2. freezing it at the level it will have reached in 2020 only for new borrowers starting in academic year 2016-7 and repaying from April 2020.
The consultation states that the preferred option is to freeze the threshold for all plan-2 (post-2012) loans thereby changing the intention to raise thresholds annually in line with earnings.
The CIPP published an online survey to gather views and opinions from CIPP members and others in the payroll profession.
We asked which option respondents would prefer and of the 66 individuals who answered the question, 53 (80.3%) favoured Option 1, to hold the threshold for all Plan 2 loans at £21,000 for five years. The remaining 13 respondents (19.7%) stated their preference for Option 2, to freeze the threshold only for new borrowers. A number of comments were given by respondents and the common theme from these was the plea to keep administration simple. Comments also supported the importance of education and to have the best and fairest system possible for students.
Of the 74 respondents, 69 (93.2%) are members of the CIPP. 8 respondents skipped the question and waived their decision to answer.
The CIPP recommend that the government implement Option 1 from the proposed date of April 2016, to freeze the student loan repayment threshold for all Plan 2 loans at £21,000 for five years.
The full consultation response is available to view through the news link below.
CIPP response to consultation on freezing the student loan repayment threshold
CIPP Policy News Journal
25/04/2016, Page 431 of 453
Made with FlippingBook - Online magazine maker