PART 1: DATES, DEFINITIONS AND OBLIGATIONS
13–16 of the ERA1996 whereas the GNS notice does not. Employers ought to contact HMRC upon receipt of a GNS notice and check on the position of an appropriate SL1 or SL2 before making any changes, particularly if the instruction is to commence deductions. From 6th April 2020 payroll records now include an “off-payroll worker” indicator flag within RTI which is used by HMRC to block SLC notices. Off-payroll workers may be subject to PAYE deductions but they are not liable to repay student loans by deductions from payroll. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS Calculation of deduction Earnings for student loan deduction purposes are those used to calculate Class 1 NICs. No account should be taken of the value of benefits-in-kind or other non-cash payments. Earnings are non-cumulative for the purpose of calculating deductions, i.e. each pay period is treated separately. Where Ni’able earnings in the pay period exceed the earnings threshold, deductions are made with reference to the SL3 tables provided by HMRC https://www.gov.uk/guidance/ rates-and-thresholds-for-employers-2021-to-2022 . From 6th April 2016 there were two types of SLD on an employer’s payroll: Plan 1 students subject to the threshold of £19,895 (£19,390 in 2020/21), and Plan 2 students subject to a threshold of £27,295 (£26,757 in 2020/21). The government originally wanted to freeze the thresholds at the 2016/17 level until a review of repayments took place, however, from 6th April 2018 both Plan 1 and 2 thresholds rose. Post graduate loans came up for repayment starting 6th April 2019 with a current threshold of £21,000, a threshold which has not changed since April 2019. The big difference between these diferent types of loan repayment is that the Post Graduate Loan (PGL) has a repayment rate of 6%, all the others are 9%. On 6th April 2021 a further loan repayment operates, applicable to students who have drawn down a loan in Scotland. The threshold for these Plan 4 deductions is £25,000 a year. Starting in 2016 the SLC has started processing loans for additional courses which will start being recovered from around 2018/19. So far loans for: • taught postgraduate courses, • PhD/masters research activities, • maintenance loans for part-time students and • second degrees in STEM subjects, have either started, see PGL below, or been discussed. In 2017 HMRC announced that on occasion its staff would request a student loan deduction start by telephone. This would only happen in an emergency and HMRC asked that employers adhere to this practice. Most employers are likely to demand an emergency SL1 as evidence before making any such deductions. No printing, copying or reproduction permitted.
136
Made with FlippingBook - Online magazine maker