Explanatory note

These Regulations amend the Education (Student Loans) (Repayment) Regulations 2009 (S.I. 2009/470) (“the Principal Regulations”). The Principal Regulations govern the repayment of income-contingent student loans paid to students under section 22 of the Teaching and Higher Education Act 1998.

Regulation 4 amends regulation 33 of the Principal Regulations which sets out the powers which HM Revenue and Customs (“HMRC”) may exercise for the purposes of establishing the amount of the repayment a borrower may be required to make under Part 3. Regulation 5 amends regulation 38 of the Principal Regulations to remove references to sections 72 and 76 of the Taxes Management Act 1970.

Regulations 6 to 19 amend Part 4 of the Principal Regulations to deal with the way employers report information to HMRC when employees commence and cease employment and about payments of earnings made to employees and repayments deducted from those payments. They also make consequential changes to the provisions dealing with the amount of the repayments for which an employer must account to HMRC in respect of each income tax period and the information employees must receive when they cease employment.

Employers to whom the new reporting requirements apply are referred to in the amendments as Real Time Information employers. Regulations 6 and 7 contain the definitions of “Real Time Information employer” and “non-Real Time Information employer”.

Regulations 8 and 9 set out the information which a new employee must provide to an employer about any liability to repay any student loan. Regulations 10 to 16 set out the information a Real Time Information employer must send to HMRC. In particular, regulation 16 inserts new regulations 59A to 59F into the Principal Regulations which set out the new reporting obligations. Regulation 59B requires Real Time Information employers to provide information to HMRC each time a payment is made to an employee and for this to be done using an approved method of electronic communications. Regulation 59E contains exceptions from the obligation in regulation 59B for certain employers. It allows those employers to report to HMRC at the end of each income tax period and does not require the reporting to be done using an approved method of electronic communications.

Regulation 17 provides that the requirement on employers to state within the P45 that an employee is a borrower also applies to Real Time Information employers.

A Tax Information and Impact Note covering this instrument will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. The Explanatory Memorandum is published alongside the instrument at www.legislation.gov.uk.