skip to navigationskip to main content

Phone: 0191 5678129 

Email:

Student loans for 2021-22

Newsletter issue - May 2021

Starting from 6 April 2021, there is a new type of undergraduate student loan that employers need to be aware of when operating payroll - the Plan 4 loan (SLP4). The new plan type has been necessary due to the Scottish government amending certain details regarding repayment, including the increase of the earnings threshold. SLP4 will apply to all new and existing Scottish borrowers. This means that Scottish borrowers that were in repayment before 6 April 2021 using the Plan 1 (SLP1) arrangements will need to be moved across to SLP4.

The new plan is applicable to any individual that received a loan from the Student Award Agency for Scotland. Whether they live in Scotland or not is irrelevant.

The Student Loans Company will inform HMRC about individuals that need to be moved from SLP1 to SLP4, and HMRC will contact employers. However, it is also possible for the employee to prompt the employer to change the plan type being used for repayment. This is important as the repayment thresholds are different across the different loan types. For 2021-22, the appropriate thresholds and repayment rates are as follows:

Plan type

Plan 1

Plan 2

Plan 4

Postgraduate

Earnings threshold

£19,895

£27,295

£25,000

£21,000

Rate of deduction applied to excess

9%

9%

9%

6%

An employer should not operate student loan deductions for off payroll workers, even if the status determination is that they are a deemed employee. Instead, the worker will make good the appropriate deductions via their self-assessment tax return.

The earnings that are subject to deductions is the NIable pay. This can be different from the taxable pay, for example where there is an optional remuneration arrangement in place. Additional earnings from commission, overtime, or bonuses increase the deductions accordingly.

Choosing a Service

Choosing an accountant that matches your needs

Meet our team

Go through our accountancy team, and see what they are

Free Initial Consultation

Understanding your accountancy requirements

Request a Callback

Lets talk at a more convenient time for you

Great reasons and promises we make to you which is why you should call us before deciding on your accountant.

Our Promises

We’re a dedicated team which strives to provide success to our clients in regards to all their accountancy needs.

Meet our team
footer_icons_artwork

Compliance and Advice

We believe you should always be control of your fees with no surprises. You are entitled to a competitive fixed quote for agreed services, which is exactly what we charge, no a penny more.

Fixed Price Accounting

We'll help you obtain clear goals in the long, medium and short term for what you want to achieve and identify the challenges in the plan and put strategies in place to overcome them.

Tailored Advice

Each business is unique and the challenges they face will be particular to your business and sector and as such our business advice is tailored to be a precise fit for you and your organisation.

Newsletter Subscription

Our monthly newsletter is full of news, views and interesting information from Michael Adamson & Co. Find out more by visiting our newsletter signup form.