In-Accountancy

News and Views

Payroll and student loan deductions

Payroll and student loan deductions guidance have been updated by HMRC to help employers deal with student loan deductions via the PAYE system, according to Stockport accountants, IN Accountancy.

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:

  • plan 1 with a threshold of £17,495 (£1,457 a month or £336 per week)
  • plan 2 with a threshold of £21,000 (£1,750 a month or £403 per week)

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:

  • your new employee’s P45 shows deductions should continue – ask your employee to confirm their plan type
  • your new employee tells you they’re repaying a student loan – ask your employee to confirm their plan type
  • your new employee fills in a starter checklistshowing they have a student loan – the checklist should tell you which plan type to use
  • HM Revenue and Customs (HMRC) sends you form SL1 ‘Start Notice’ – this will tell you which plan type to use

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 on 0161 456 9666 or email sarah@in-accountancy.co.uk.

Internet link: Guidance

Related articles

Accountants for Amazon Sellers
Limited Companies

Amazon Sellers – top tips to ensure your long term success

Have you ever considered selling on Amazon or eBay, setting up an eCommerce business, or a little side hustle?

If this sounds like you, it seems you are not alone.

More and more people these days are selling online to boost their income, sometimes just for a bit of fun and with no higher plans, and other times in the hopes of turning this so called side hustle into their dream job and their very first foray into entrepreneurship…

We have been receiving lots of enquiries recently about accounts and tax for Amazon sellers, so I’ve recorded a little video outlining our top tips if you are thinking about giving it a go yourself…

Read More »

Find out how we can help?

Lectus scelerisque a donec tincidunt litora per eleifend eget ut sagittis conubia pharetra scelerisque dui ultricies duis parturient auctor adipiscing.

 

Let’s start a conversation 

    Subscribe me for updates and news from In Accountancy

    IN-ACCOUNTANCY