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Level 1

Student Loan Deductions on Standard Payroll

I incorrectly put my employee on the wrong student loan repayment plan and have been deducting too much from him. I've been instructed to repay him on the next payrun and add the refund as additional pay. My question is how will HMRC know this is related to his student loan so they can update his student account? Can anyone help?

6 REPLIES 6
QuickBooks Team

Re: Student Loan Deductions on Standard Payroll

Hello GMK3,

 

Thank you for your message.

 

On Standard Payroll - We don't have the option to do this on the next payrun - atleast not to inform HMRC specifically about it being a student loan repayment.

 

We do have the option to rollback, make the correction and re-submit to HMRC, but that will change the NET Pay for each of those periods - which the difference would be paid to HMRC upon the next pay, but that could be deemed to be incorrect to what occured in real life. I'm going to suggest re-speaking to HMRC, and ask them if rolling back and resubmitting is an option - if they advise no, i'm afraid you'll only have the option to use HMRC Basic Tools for this very specific correction.

Level 1

Re: Student Loan Deductions on Standard Payroll

Hi JamesC

 
Thank you for replying to my query. 
 
I've spoken with HMRC and they said I need to turn off the student loan deductions as the employee is down as not having a student loan. I then need to change the year to date figures on the next FPS for both Plan 1 and Plan 2 (I changed the student loan to Plan 2 for the last payroll when my employee informed me it was wrong. I've since found out I shouldn't have done this until HMRC had notified me) and refund the employee all deductions from 6 April. They said the software should work out the refund if I turn the student loan deductions off and amend the year to date figures but I can't see where I would be able to do this. 
 
Do you think I need to amend it on Basic Tools?
QuickBooks Team

Re: Student Loan Deductions on Standard Payroll

It's nice to see you again, @GMK3,

 

If you set up the student loan as a deduction in the employee's paycheque, you can turn it of directly to their profile. Follow the steps below:

 

  1. Go to Employees menu from the left toolbar, then tap the Employees tab.
  2. Select the employee name.
  3. On his profile, press the Actions button, then select Deductions.
  4. Locate the deduction you want to disable, then click the switch icon.

 

For more information about Stan    dard Payroll and its processes, see this article: QuickBooks Online Standard Payroll Hub.

 

If you have other questions in mind or need further help with the employees deduction, let me know in the comment section. I'll be glad to share and provide additional guidance at any time. Have a good one!

 

 

Level 1

Re: Student Loan Deductions on Standard Payroll

Hi Jen_D, thanks for the info. 

 

I set up the student loan in the employee Tax Information and have now turned it off. However I'm still unsure how to correct the previous deductions. 

 

HMRC have said the student loan needs refunding and I need to amend the year to date figures but submitting a new FPS. The only way I can see how to do this is by deleting previous payrolls and re-submitting but this seems very time consuming. 

 

If I were to adjust the amounts on Basic Paye Tools for this particular employee how would I go about updating this on Quickbooks?

 

Thanks

QuickBooks Team

Re: Student Loan Deductions on Standard Payroll

Hi GMK3

 

You can un-tick the student loan option and create an additional payment for the re-payment of the student loan however it is not possible to correct the year to date figures/enter a negative value which would be reflected on the P32 and FPS submitted to HMRC.

The only way would be to rollback the payrolls, as suggested, un-tick the student loan and re-run the payrolls and re-submit the FPS's and select correction to earlier submission for the reason for the submission.

Level 1

Re: Student Loan Deductions on Standard Payroll

Great thank you for all you help, I now understand. I will rollback the payrolls then and re-submit.