[UK] Employer Student Loan / Postgraduate Loan Stop Prompts


The Global Payroll Association is really pleased to have been recently invited to be part of HMRC’s Collection of Student Loans Consultation Group.  As a recognition of our role as a representative body, the GPA will sit alongside the likes of the Department for Education, the Student Loans Company, the British Computer Society (BCS) and the Charted Institute of Taxation (CIOT).

As part of the distribution list, on the 22nd of August 2019 we received the following communication from HMRC which will impact employers.  We want to pass this on in full as it seems particularly timely given the recent press coverage about ex-students overpaying their loans:

From September 2019, HMRC will send Generic Notification Service (GNS) messages to employers who continue to take Student Loan or Postgraduate Loan (PGL) deductions from their employee after a stop notice (SL2 or PGL2) has been issued. 

We are introducing this change to help

  • increase employer compliance with stop notifications and
  • reduce the amount that stopped borrowers overpay by.

The GNS messages

  • are a prompt for employers to stop taking deductions from the next available pay day
  • will work in the same way as our other GNS Student Loan / PGL prompts
  • will be delivered to employers PAYE online accounts.

Employers who continue to take deductions will receive a maximum of 2 GNS message prompts per tax year for each employee and loan type they incorrectly deduct under. 

There will be 8 potential notices depending on whether the employee was a Student Loan borrower, a PGL borrower or they never had a loan.  The GNS messages will be titled:

  1. Student Loan stopped borrower Prompt 1
  2. Student Loan stopped borrower Prompt 2
  • Postgraduate Loan stopped borrower Prompt 1
  1. Postgraduate Loan stopped borrower Prompt 2
  2. Student Loan non borrower Prompt 1
  3. Student Loan non borrower Prompt 2
  • Postgraduate Loan non borrower Prompt 1
  • Postgraduate Loan non borrower Prompt 2.

 

To ensure employers are made aware of this change, we will add an

 

Global Payroll Association Comment

One thing that we will be mentioning at the September meeting of the consultation group is the need for this in the first place.  Surely, if an employer is continuing to take a loan from a borrower that has repaid (a “stopped borrower”) or taking a loan from someone that does not have to repay (“a non-borrower”), the best action is to reissue the stop notice.

We understand that sending out new stop notices is more expensive than the cheaper alternative of sending a Generic Notification Service message.  But will a GNS message sent to the employer actually reach the person that is processing the payroll.  And will the employer access these messages anyway?

If you are an employer that accesses the Gateway to get GNS messages, be aware of this new one coming imminently.