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Student loan threshold changes for 2020-21 9 August 2019
The Department for Education (DfE) has confirmed the annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans.
The current threshold for 2019-20 for Plan 1 is £18,935 and the DfE have confirmed that from 6 April 2020 the threshold will rise to £19,390 for Plan 1. Earnings above £19,390 will be calculated at the usual rate of 9%.
The current threshold for 2019-20 for Plan 2 is £25,725 and the DfE have confirmed that from 6 April 2020 the threshold for post 2012 loans will rise to £26,575 for Plan 2. Earnings above £26,575 will be calculated at the usual rate of 9%. The DfE introduced a new loan type from 6 April 2019, Postgraduate Loan (PGL). The current threshold for PGL for 2019-20 is £21,000. For 2020-21 the threshold will remain at £21,000 and earnings above this will continue to be calculated at 6%.
Full details of annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans and Mortgage Style Student Loans can be found on GOV.UK.
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Employer Student Loan / Postgraduate Loan Stop Prompts 23 August 2019
From September 2019, HMRC will send Generic Notification Service (GNS) messages to employers who continue to take Student Loan or Postgraduate Loan (PGL) deductions from their employee after a stop notice (SL2 or PGL2) has been issued.
HMRC is introducing this change to help: • increase employer compliance with stop notifications and • reduce the amount that stopped borrowers overpay by.
The GNS messages: •
are a prompt for employers to stop taking deductions from the next available pay day • will work in the same way as our other GNS Student Loan / PGL prompts • will be delivered to employers PAYE online accounts.
Employers who continue to take deductions will receive a maximum of 2 GNS message prompts per tax year for each employee and loan type they incorrectly deduct under.
There will be 8 potential notices depending on whether the employee was a Student Loan borrower, a PGL borrower or they never had a loan. The GNS messages will be titled:
The Chartered Institute of Payroll Professionals
Payroll: need to know
cipp.org.uk
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