Page 4 of the February 2019 Employer Bulletin contains a short piece called “Sharing PAYE information with Student Loans Company (MFDS)”. MFDS = “More Frequent Data Sharing” just to explain.
The Global Payroll Association wants to expand HMRC’s small piece in a little more detail and explain how the introduction of this new acronym could affect employers or, at least, is something employers should be aware of.
Student loans are administered and deducted from employees in the majority of cases by the employer through the payroll. This information is declared on the FPS and paid over to HMRC along with the tax and NICs. Annually, HMRC then pass this information to the Student Loans Company (SLC) who use the information to credit ex-students’ loan accounts. Because the information is only passed over once a year, an ex-student who may be nearing the end of the loan (or has paid it off already) may experience an over-deduction in the payroll.
This is not the fault of the employer but is a problem caused by the infrequent data sharing between HMRC and SLC. We do what we are told by HMRC and if they don’t tell us to stop a student loan deduction then we don’t.
Legislation in the form of the Education (Student Loans) (Repayment) (Amendment) Regulations 2019 require HMRC to pass student loan information to SLC on weekly basis. So this means that MFDS of student loan information will allow the SLC to see sooner when a loan is nearing repayment or has been repaid. Employers may want to be armed with this information because:
- This should mean that we receive the same number of student loan stop notices in the year but they will be spread evenly and not come in a bulk after the SLC have processed the information from HMRC
- Employees could ask questions as the Employer Bulletin implies so this piece gives more facts and points to the legislation to employers can answer fully
- It does represent that RTI is at last being used. We have been sending the information in real time for years and it has taken HMRC and SLC that long to get their data sharing in order and IT systems presumably. Plus the legislation now forces them to do it
Good for employees with student loans and about time says the Global Payroll Association. A new acronym to add to our payroll “jargon buster” when we update it for 2019/20 new tax year.
Page 4 of the February 2019 Employer Bulletin contains a short piece called “Sharing PAYE information with Student Loans Company (MFDS)”. MFDS = “More Frequent Data Sharing” just to explain.
The Global Payroll Association wants to expand HMRC’s small piece in a little more detail and explain how the introduction of this new acronym could affect employers or, at least, is something employers should be aware of.
Student loans are administered and deducted from employees in the majority of cases by the employer through the payroll. This information is declared on the FPS and paid over to HMRC along with the tax and NICs. Annually, HMRC then pass this information to the Student Loans Company (SLC) who use the information to credit ex-students’ loan accounts. Because the information is only passed over once a year, an ex-student who may be nearing the end of the loan (or has paid it off already) may experience an over-deduction in the payroll.
This is not the fault of the employer but is a problem caused by the infrequent data sharing between HMRC and SLC. We do what we are told by HMRC and if they don’t tell us to stop a student loan deduction then we don’t.
Legislation in the form of the Education (Student Loans) (Repayment) (Amendment) Regulations 2019 require HMRC to pass student loan information to SLC on weekly basis. So this means that MFDS of student loan information will allow the SLC to see sooner when a loan is nearing repayment or has been repaid. Employers may want to be armed with this information because:
- This should mean that we receive the same number of student loan stop notices in the year but they will be spread evenly and not come in a bulk after the SLC have processed the information from HMRC
- Employees could ask questions as the Employer Bulletin implies so this piece gives more facts and points to the legislation to employers can answer fully
- It does represent that RTI is at last being used. We have been sending the information in real time for years and it has taken HMRC and SLC that long to get their data sharing in order and IT systems presumably. Plus the legislation now forces them to do it
Good for employees with student loans and about time says the Global Payroll Association. A new acronym to add to our payroll “jargon buster” when we update it for 2019/20 new tax year.