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HMRC internal manual

Compliance Operational Guidance

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HM Revenue & Customs
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Supporting Guidance: employer compliance: guidance by subject: liaison: student loans

The Education (Student Loans) (Repayment) Regulations 2000 replaced by the Education (Student Loans) (Repayment) Regulations 2009, changed the nature of higher education funding recovery following the introduction of a Student Loan scheme. Operation of the scheme involves HMRC, the Department for Business, Innovation & Skills (BIS), and the Student Loans Company Ltd working in partnership.

From April 2000 HMRC became responsible for collecting repayments of Student Loans in respect of the new style loans, known as income contingent loans. Students, however, continue to receive these loans from the Student Loans Company Ltd, which retains responsibility for administering all loans, and for collecting repayments from borrowers not resident in the UK.

Where the borrower’s tax affairs are handled under PAYE the employer deducts Student Loan repayments from pay with most employers using payroll software to work out the deductions.

For borrowers who receive earnings liable to Class 1 NIC, Student Loan repayment deductions are made by employers when earnings exceed the annual threshold.

When applying the threshold from April 2016 there will be 2 student loan plans types which will be known as Plan 1 and Plan 2.  Each plan will have a different threshold that will be updated annually.  There is a table of the current threshold values for each plan type located on SEES (Open SEES - Info – Employers NIC and tax tables – Student Loan Recovery tab).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Employer Compliance staff should familiarise themselves with the CSL Manual. (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)