BrightPay Blog


Sep 2016

11

Student Loans - which Plan type to use?

On 6th April 2016, a new plan type for student loans was introduced by HMRC. Employers should now be deducting student loan repayments from their employees using either Plan 1 or Plan 2.

A query that regularly comes into our BrightPay Helpdesk is 'How do I know which plan type to use?'

HMRC provide the following guidance on how you can determine an employee’s student loan plan type:

 - check the Student Loan Start Notice (SL1)
 - ask your new employee to fill in the starter declaration checklist
 - ask your employee to go online to the Student Loan Company website at www.slc.co.uk/students/loan-repayment.aspx – if they do not know their plan type already.

HMRC also advise that if you receive an SL1 with a start date prior to 6 April 2016 and there is no plan type shown, you should make deductions under Plan 1.

Generic notifications have been sent by HMRC to those employers who haven’t reported any student loan deductions for a specific employee, but for whom deductions are expected. Where two generic notifications have been sent to an employer already, HMRC will begin contacting such employers to discuss the matter further.

Posted byVictoria ClarkeinPayroll Software