Changes to Starter Checklist from April 2019 to accommodate Postgraduate Loans | Expert Payroll Services

Changes to Starter Checklist from April 2019 to accommodate Postgraduate Loans

Postgraduate-Loans

Here at EPS we have continued our pro-active approach to legislative changes, providing our clients with copies of the new starter checklist which includes a more detailed section relation g to Student Loans and Postgraduate Loans. We have also been offering support to help answer any employee queries relating to the new form.

The new form should be used in conjunction with a P45 to ensure the correct type of loan deductions are applied to new employees’ salaries.

What is a Postgraduate Loan? A Postgraduate Loan lets you borrow up to £10,609 (increasing to £10,906 in 2019) for a Master’s Degree. The loan is provided by Student Finance England on behalf of the UK Government and is paid in regular instalments. The loan is paid back when the recipient starts earning over £21,000 per year at a rate of 6% applied to earnings over this threshold.

So, what’s new on the Starter Form? Firstly, the existing student loan section has been redesigned with the inclusion of ‘both’ option for employees who may have both Plan 1 and Plan 2 loans.

Secondly, there is an entirely new section entitled ‘Postgraduate Loan’ where employees can indicate if they have such a loan and also if the loan should be deducted from their salary i.e., they are not repaying the loan via direct debit. These changes can be found on page 2 of the form, there has been no change to page 1 which includes employee details and starter declaration as before.

Our software will of course be updated from April 2019 to enable the calculation and deduction of this new loan type which will then be reflected on P32 report. We are also providing help and guidance to our clients allowing them to deal with any queries from their employees. This advice includes recommending employees who have a P45 to also complete a Starter Form. This is necessary because current P45 cannot specify what type of student loan the employee may have (plan 1, plan 2 or both) and does not have a section relating to Postgraduate Loans. We are hopeful in the future HMRC will address this issue and redesign current P45 to better reflect latest legislative changes.

As always, we are available to support our clients with any change of legislation and assist with any queries that may arise. To find out more about our outsourced payroll services Why not give us a quick call on 020 3802 1534 or email sales@expertpayrollservices.co.uk, you are also welcomed to visit our website for payroll outsourcing services.