Repayment thresholds for student finance confirmed
Repaying student finance can seem complicated, with a number of different plan types each having different repayment thresholds. The thresholds for the forthcoming year have just been confirmed. What’s the full story?
If your employees have an outstanding student loan, HMRC will notify you via a start notice. You must then deduct repayments via the payroll. From your perspective as the employer, this is straightforward, as the payroll software should work out the correct amount in each pay period. You just need to ensure you set them up on the correct loan type. However, an awareness of the thresholds is still worth having, as it can help inform decisions about pay rises or bonuses. The thresholds for 2026/27 will be as follows (previous levels in brackets).
- Plan 1 — £26,900 (£26,065)
- Plan 2 — £29,385 (£28,470)
- Plan 4 — £33,795 (£32,745)
- Plan 5 — £25,000 (first year in operation)
- postgraduate loan — £21,000 (unchanged)
Above these thresholds, repayment is at 6% for postgraduate loans, and 9% for all other types.
Related Topics
-
Practical guide: Tax-efficient will planning with residential property
An individual has a significant property portfolio which provides them with their sole source of income. They want to gift shares in some property to their daughter but retain the income. Can they do this without triggering the reservation of benefit rules?
-
Will HMRC treat late processed invoices as errors?
Your business processes invoices when they have been approved by budget holders, so some will be processed a month late, delaying your input tax claim. How might HMRC’s updated guidance help here?
-
Are redundancy payments tax deductible?
A seemingly simple question we’re often asked is how much tax relief a business is entitled to for redundancy payments. The answer is that it depends on the situation. How might the circumstances of a redundancy affect the tax deduction?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.