Student and Postgraduate Loans

These flashcards cover key concepts related to student and postgraduate loans, including deductions, thresholds, and responsibilities of employers and HMRC.

What is the responsibility of HMRC regarding student loans in the UK?

HMRC collects repayments of student and postgraduate loans on behalf of the Student Loans Company.

Which form does HMRC use to notify employers to start loan deductions?

Employers are notified using a Start Notice (Form SL1 for student loans and Form PGL1 for postgraduate loans).

What is the annual threshold for student loan Plan 1 in 2025/26?

The annual threshold for student loan Plan 1 is £26,065.

When must deductions begin if a new employee provides a relevant Form P45?

Deductions must start from the first payday after the start date on the Form P45.

How is the student loan deduction calculated for earnings exceeding the relevant threshold?

The deduction is calculated as 9% of earnings in excess of the threshold, rounded down to the nearest whole pound.

What is the postgraduate loan annual threshold for 2025/26?

The postgraduate loan annual threshold is £21,000.

What should employers do if a new employee indicates they have both a student and postgraduate loan?

Employers should operate loan deductions for both loans once the appropriate threshold for each has been reached.

What happens if an employer has been using the wrong plan for student loans?

They should start using the correct plan threshold from the next payday without considering previous overpayments or underpayments.

Which forms are used to notify employers to cease deductions?

HMRC issues a Stop Notice, using either Form SL2 or Form PGL2.

What action should an employer take if they receive no Stop Notice when an employee leaves?

The employer must indicate on Form P45 that student or postgraduate loan deductions should continue.