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Student loan news(1 Post)
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" HMRC alters student loan repayments amid service problems
HMRC has made changes on the deduction of student loan repayments from employees’ pay with the introduction of two types of student loan, plan one and plan two, coming into effect from the 2016/17 tax year, however issues have arisen with downloading employer notices for student loans
HMRC has had PAYE online problems affecting employers when trying to download employer notices including P6, student loan, generic notifications and real time information (RTI) notifications.
National insurance numbers beginning with KC were issued recently for individuals such as graduates but are causing employers problems when submitting RTI data for an employee with this particular national insurance number.
HMRC has said: ‘We are working hard to resolve this issue quickly and will provide more information shortly’.
Under the new student loan repayment scheme when an employer hires a new employee they will need to know what type of loan the employee has to ensure that the correct deductions are made.
Repayment plan one has a threshold of £17,495 (£1,457 a month/ £336 per week) and plan two has a higher threshold of £21,000 (£1,750 a month/ £403 per week).
Typically plan two applies to those who started their study course after September 2012, when the government increased university fees to £9,000 a year.
To work out the correct figure of employee earnings that student loan reductions are due on, employers should use the same gross pay amount used to calculate national insurance contributions (NICs).
If the plan type is unknown the student loan company should be contacted or deductions should originally be made using plan one.
HMRC will issue ‘start notices’ if deductions are not being made on an individual that should be making student loan repayments or if the plan being used is incorrect.
Deductions should stop being made if HMRC issues the employer a ‘stop notice’ and deductions should cease from the first available payday from the date received.
HMRC’s student loan repayments: guidance for employers is here www.gov.uk/guidance/special-rules-for-student-loans