Postgraduate Loans Deductions Changes

HMRC announced that from 6th April 2019, Postgraduate Loans (PGL) are due to be repaid through the Pay As You Earn (PAYE) system. The repayment for these are similar to the current Student Loan deductions, and a threshold has been set at £21,000 for the tax year 2019/2020. Any earnings above this will be calculated at 6% and deducted from pay.

A borrower, from April 2019, may be liable to repay a Student Loan type and Postgraduate Loan concurrently, as they are separate loan products.

This means that, where applicable, employers will have to deduct both Postgraduate and Student Loan deductions, and report these to HMRC through the Full Payment Submission (FPS) each period.

RC Payroll Solutions check for Student and Postgraduate Loan notifications from HMRC each period as standard and apply and deduct these using the latest rates and thresholds.

Keep up-to-date with latest payroll news, legislation changes and updates by following our Facebook and Twitter pages.