Student Loan Repayments

Did you know that new regulations have changed the nature of higher education funding? These involve the introduction of a new Student Loan scheme.

You will be affected if you have an employee who is liable to repay their student loan while working for you. This applies to loans taken out after August 1998 so you may not see it for some time.

From 6 April 2000, employers will deduct student loan repayments from relevant employees - along with PAYE tax and NICs. The deductions of loan repayments will be on a weekly or monthly basis.

Employers will work out the amount of the repayment. The calculation of the repayment will be 9% of NICs liable pay above £10,000 a year (or the weekly/monthly equivalent of £10,000).

Employers will record the amount of the loan repayment deducted on

• The employee's payslip
• The form P11 Deductions Working Sheet (or equivalent)
• The P14/P60 and P35.

Employers will pay the amount of the student loan repayments deducted to the Inland Revenue along with PAYE tax and NIC contributions.