News
Student loan thresholds to rise from 6 April 2021
22 March 2021
At the start of the new tax year in April the thresholds for student loans will increase, which may affect employees that are repaying their academic fees.
The threshold for student loan Plan 1 will increase from £19,390 to £19,895 from this date, and employees on Plan 2 will see their student loan threshold rise from £26,575 to £27,295.
Employees repay nine per cent of the amount they earn over the threshold for Plan 1 and 2.
Meanwhile, the threshold for Scottish student loans, known as Plan 4 loans, starts at £25,000, with the same rate of repayment applied as Plan 1 and 2, while the threshold for postgraduate loan repayments will begin at £21,000, with earnings above this threshold calculated at six per cent.
Employers must take action to start student and or postgraduate loan (PGL) deductions where the new thresholds are met and record the deductions correctly on each employee’s payslip.
If the earnings are below the student loan and/or PGL thresholds, the employer should update the employee’s payroll record to show they have a student loan and/or PGL and file the start or stop notice with HM Revenue & Customs (HMRC). Deductions should continue until HMRC tells an employer to stop.
Link: Student loan and postgraduate loan repayment guidance for employers
Case Studies
-
Sometimes a business does exactly as it says on the tin
-
A shared passion for architecture and a head for numbers
-
Smiles all round for dental practice
-
Customer care is top of the list for packaging business
-
Cut above the rest in personal management style
-
A modern approach required for music moguls
-
Child's play with proactive accounts management
-
Taxing demands with old school charm
-
A taste for growth, a thirst for knowledge