All unincorporated businesses, including sole traders, the self-employed and trading partnerships, will be taxed on…
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.