Postgraduate Loans overview for Software Developers

11 July 2018

HMRC’s Software Developers Support Team (SDST) has provided an overview of how the postgraduate loan repayments will work from April 2019.

 

“Postgraduate Loans (PGL) are due for repayment through the PAYE process from April 2019.  The repayment threshold is set at £21,000 and loans will be repaid at a rate of 6%.  The deductions will be based on NICable pay and rounding rules will follow that of existing Student Loans. There will be manual tables alongside computerised specifications.

There are no separate plan types associated with a postgraduate loan. The Payroll Test Scripts will be shared for Postgraduate Loans in October 2018, alongside the existing Plan 1 and Plan 2 thresholds for Student Loans.

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.

The New Starter Checklist (including the ExPat Version) and the P60 will be revised.  Form P45 is under consideration regarding potential changes and more information will be shared once we have made a decision on how to proceed.

PGL1 and PGL2 forms are being introduced, in paper and electronic formats.  These will run alongside the existing SL1 and SL2 but will be specific to PGL.  Each loan type will be started and stopped in its own right i.e. if an employee has paid off both their Student and Postgraduate Loan the employer would receive two stop notices – an SL2 and a PGL2.

Postgraduate Loans will be calculated and sent in the employer’s regular payments to PAYE.  This will result in different boxes on the FPS – we are unable to specify the exact data items at this point in time but will share more information when available.  It would be HMRC’s preference that PGL is shown separately to Student Loan on an employee’s wage slip.

HMRC are in the process of developing separate PGL-specific ‘GNS’ Messages and these will be shared once agreed.

The first PGL1’s will be issued alongside the SL1’s in February/March 2019. A PGL2 can be received any time following April 2019. A high level message is going to be shared in the August Employer and Agent Bulletins.

HMRC will share further information in due course and more details will be available when the Tech pack is released.”