check the start date shown on the notice and take deductions from the next available pay day. The full details are set out in HMRC Student and postgraduate loan start notice (SL1/PGL1). What are the Student Loan Repayment Plans? You earn £30,000 per annum for the 2020/2021 tax year, which is over the threshold of £19,390. What we know about the plan so far: From April 2021 the plan threshold will increase to £25,000; It applies to all new and existing borrowers in Scotland (issued by the Student Awards Agency Scotland) from April 2021 Then this free business setup checklist is what you need to check you’ve taken all the right steps to set up the financial and legal side of your business. If your client receives a student loan and or PGL start notice (SL1/PGL1) from HMRC, it is important that you: If the earnings are below the student loan and/or PGL thresholds, update the employee’s payroll record to show they have a student loan and/or PGL and file the start notice. £372.88 from weekly earnings for weekly paid employees 2. Student Loan Thresholds 2019/20. So say you graduate in July 2020 you’ll need to start repaying your student loans from April 2021. If you are employed however and your earnings take a dip and fall below the threshold, then you can apply for a student loan refund by contacting the Student Loans Company on 0300 100 0611. The repayment threshold for Student Loan Plan 1 will increase by 3% and the repayment threshold for Student Loan Plan 2 will increase by 2.7%. But if you’re a university graduate, you’ll still have to repay it regardless of your employment status. PLAN 2 LOANS In other words, just like your income and expenses, you’ll need to include details when you fill in your tax return each year. record the deductions correctly on the employee’s full payment submission. This is because students loans can be written off in full and you’ll simply lose your money. That means if you’re self-employed you’ll need to include your student loan on your self assessment for 2021/2022 which must be filed online by 31 January 2022. In fiscal year 2017/18, the annual repayment threshold for Plan 1 stands at £17,775 (US$23,214) and will rise to £18,330 (US$23,939) in 2018/19. The information contained in this website is for guidance and information purposes only. In a really helpful document published on the 11 th of January 2019, HMRC have published a lot of the rates and thresholds that are appropriate for payroll for the tax year 2019/20. If you have more than one loan you may be on more than one plan, so double check all your paperwork to help decide which ones apply to you. 6 April 2005 to 5 April 2012. The current Plan 2 rate of £25,725 will also rise to £26,575. Partnership Tax Returns (SA800) Explained. 08/08/2019. Please check your inbox to confirm your email address (you may need to check your spam folder) and your cheatsheet will follow! Planning to start a business? Whether you are employed or self employed, the repayment thresholds are the same. Repaying Your Student Loan When You’re Self-Employed. Repaying your student loans when you’re self-employed is handled as part of your HMRC self assessment. In this guide, you’ll learn how repayments must be made, when they start and how to declare them to HMRC. This will come into effect from 6th April 2018. The repayment threshold for the Postgraduate loans will remain the same. So your interest rate will remain at 1.1%. You’ll need to complete the student loan section of your self-assessment tax return if the SLC has told you that you need to start making repayments in Section 2 ‘Tell Us About You’ of your tax return. If you took your loan out in England or Wales before 1st Sept 2012, you’ll repay your loan under HMRC’s Plan 1. Can I Claim for the cost of a Replacement Kitchen for a Rental Property on my Tax Return? Then book a one on one 15 minute session with me today! Income Contingent Student Loans for post-2012 (Plan 2) loans The repayment threshold for post-2012 (plan 2) loans will rise to £27,295 from 6 April 2021 to 5 April 2022. Loans taken out post-September 2012 in England and Wales become eligible for repayment when the higher threshold of £27,295 is reached. Editor, Accountancy Daily, published by Croner-i, The thresholds for student loans will increase from the new tax year in April, affecting any employees paying off their academic fees, while interest rates remain at 9%. Summary of the Student Plan thresholds: Plan 1 loans will increase from the current threshold of £19,390 to £19,895 in 2021/22. A separate stop notice, SL2 will not be issued for this change. The threshold for student loan Plan 1 increases to £19,895, and earnings above this threshold will continue to be calculated at 9% interest. An employee may repay Plan 1 or Plan 2 or Plan 4 and PGL at the same time. You’ll only start making Student Finance repayments once you’ve left your course and are earning enough. In very basic terms, student loan repayments are due at a rate of 9%: on your earnings over £19,895 a year (from 6 April 2021 to 5 April 2022; for 2020/21 the threshold was £19,390), whether from employment or self-employment Although if your earnings do take a dip you can apply to reduce your payment on account due by 31 July. The repayment threshold will rise for most student loans from 6 April 2020: Plan 2 loans: All English and Welsh loans for those who STARTED uni in or after 2012. Deductions should continue until HMRC tells your client to stop. This date is known as the Statutory Repayment Due Date (SRDD) and is the date when the borrower is due to start repaying their loan. 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 new plan will be operated by employers in the same way as plan types 1 and 2. Once the threshold earnings have been reached, employers will only have to operate either Student Loan Plan Type 1, Plan Type 2 or Plan Type 4 through payroll, even though an employee may have … There are rules in place that mean student loans are written off depending on plan type, where you are from and when you took your loan. Plan 2 student loan threshold rises to £27,295, earnings above this threshold will continue to be calculated at 9%, up from £26,575. For any loans before 2012, Plan 1 Loans will apply and for loans after 2012 Plan 2 Loans will apply. How to Repay Your Student Loan on Your Self-Assessment Tax Return, 1. Student loan repayments Plan 1 threshold for 2018 – 19. Does a Director Have to Register for Self-Assessment? Please check your inbox to confirm your email address (you may need to check your spam folder) and your checklist will follow! For all schemes, you’ll be expected to start making student loan repayments from the April (which is the start of the new tax year) after you graduate, assuming you earn above the thresholds. Let’s say in 2020 /21 a basic rate taxpaying graduate rents out a flat and earns above the student loan repayment threshold (the repayment thresholds for 2019 /20 are £18,935 on earned income for Plan 1 loans, £25,725 on earned income for Plan 2 loans and £2,000 for unearned income) and the mortgage interest for the rental property is £4,000. Rate or threshold 2021 to 2022 rate; Employee earnings threshold for student loan plan 1: £19,895 per year £1,657.91 per month £382.59 per week: Employee earnings threshold for student loan plan 2 Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Student loan repayment threshold for tax year 2015-16. While you are studying you’ll pay interest of 5.6% on plan 2 loans, calculated as the retail price index, currently 2.6%, plus 3%. Annual repayment threshold. While much is written about whether those with savings should overpay the current English Plan 2 student loans, there's little out there about Plan 1. From 6th April 2021 this threshold will increase to £19,895. Postgraduate student loans are repaid under another plan type variant of the ICR scheme, at a rate of 6% above the repayment threshold and interest is added at a fixed rate of RPI+3% (see Postgraduate student loans below). You can choose to make extra payments to clear your student loan quicker once your income goes over the income threshold. After this the interest you’ll pay will depend on your annual income: The current interest rate is 5.6% on postgraduate loans, calculated as the retail price index, currently 2.6%, plus 3%. 23 August 2017. check your client’s online account for student loan and or postgraduate loan start and stop notices, if the email or correspondence address has changed let HMRC know as soon as possible; take the correct action to start student and or postgraduate loan (PGL) deductions as soon as possible; and. The repayment threshold for Plan 1 loans is currently £19,895/year (£1,657/month or £382/week) before tax. Sara White is editor of Accountancy Daily, published by Croner-i, and in... Our CPD Tracker allows you to bank structured CPD time. If you need to make student and or postgraduate loan deductions from 6 April 2021, you will need to know which plan or loan type to use. Postgraduate loans are written off 30 years after the April you were first due to repay if you are a student from England or Wales. 3.1 Example of Plan 1 Student Loan Repayments You earn £30,000 per annum for the 2020/2021 tax year, which is over the threshold of £19,390. £15,000. The current repayment threshold for 2017-18 for Plan 1 is £17,775 and the student loans company has confirmed that from 6 April 2018 the repayment threshold for pre-2012 loans will rise to £18,330 for Plan 1.. The Department for Education (DfE) has confirmed the annual updates to the Interest Rates and Thresholds of Income Contingent Student Loans. PLAN 1 LOANS Under Regulation 15(2), Plan 1 loans enter repayment status at the start of the tax year (6 April) following the date that the student withdraws from or completes the course. 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