New student loan plan type — Plan 5

HMRC is giving employers advance notice that the Department for Education (DfE) has introduced a new student loan Plan type 5. Repayments are due to begin from 6 April 2026.

Key details include that:

• Plan 5 will be operated and collected in the same way as current plan types 1, 2 and 4

• the earliest repayments will start for PAYE is 6 April 2026 

• the annual repayment threshold will be £25,000

• repayments will be made at 9% on earnings over the £25,000 threshold

• employers will start to receive student loan start notices from March 2026 for Plan 5 borrowers due to go into repayment from April 2026

• Plan 5 is for those who applied to Student Finance England and started courses from August 2023 onwards

Software developers are working on payroll updates due to be in place by 6 April 2026. Guidance and forms will be updated by 6 April 2026.

Employers are reminded that they can:

• only deduct one plan type at a time, Plan 1, Plan 2, Plan 4 or, from April 2026, Plan 5

• deduct the postgraduate loan at the same time as one student loan plan type — Plan 1, Plan 2, Plan 4 or Plan 5

If you would like further personal advice or help with Self-Assessment, please contact our team:

📞 0161 224 3510📧 info@aminandcoaccountants.co.uk, 🌐 www.aminandcoaccountants.co.uk

Expert tax advice you can trust – Amin & Co Accountants, Manchester.