At the start of the new tax year in April the thresholds for student loans will increase, which may affect employees that are repaying their academic fees.

The threshold for student loan Plan 1 will increase from £19,390 to £19,895 from this date, and employees on Plan 2 will see their student loan threshold rise from £26,575 to £27,295.

Employees repay nine per cent of the amount they earn over the threshold for Plan 1 and 2.

Meanwhile, the threshold for Scottish student loans, known as Plan 4 loans, starts at £25,000, with the same rate of repayment applied as Plan 1 and 2, while the threshold for postgraduate loan repayments will begin at £21,000, with earnings above this threshold calculated at six per cent.

Employers must take action to start student and or postgraduate loan (PGL) deductions where the new thresholds are met and record the deductions correctly on each employee’s payslip.

If the earnings are below the student loan and/or PGL thresholds, the employer should update the employee’s payroll record to show they have a student loan and/or PGL and file the start or stop notice with HM Revenue & Customs (HMRC). Deductions should continue until HMRC tells an employer to stop.

Link: Student loan and postgraduate loan repayment guidance for employers

HM Revenue & Customs (HMRC) has released new guidance that brings changes to the company car benefit calculations, as the Government looks to encourage greater use of ultra-low emission vehicles (ULEV).

Under the new rules, if a ULEV has a CO2 emission figure of 1-50g/km, businesses will now need to provide the car’s zero-emission mileage, which covers the distance that the car can travel in miles on a single electric charge.

While there will be no change to the way company car tax data is reported, companies may need to provide additional information on the P11D.

To meet this new requirement for ULEVs, from 6 April 2021 a new zero-emission mileage field will be shown on the P11D form (both online and offline), which will require a business to provide this new information.

Where a company owns the vehicle, the zero-emission mileage figure can be found on the vehicle’s Certificate of Conformity (CoC), which may display this figure as the ‘electric range’. This may also be referred to as combined or equivalent AER (All-Electric Range).

Where the zero-emission mileage figure is displayed on the CoC in kilometres, it must be converted into miles and rounded up to the nearest mile.

Businesses that are leasing a vehicle(s), should request and obtain this new data in the same way they currently receive information for company car tax reporting. Where a fleet or car leasing company cannot provide this information, businesses can often obtain the zero-emission mileage figure from the car’s manufacturer.

This follows additional changes to banding for ultra-low emission vehicles (ULEVs), which has seen the introduction of 11 new ULEV bands and a separate zero-emissions band.

These latest changes are part of plans to move the calculation of company car tax and vehicle exercise duty over to the Worldwide Harmonised Light Vehicle Test Procedure (WLTP), instead of the New European Driving Cycle (NEDC).

Following this changeover, new cars first registered from 6 April 2020 will use CO2 emission figures based on WLTP, while cars registered before 6 April 2020 will use CO2 emission figures based on NEDC.

To take this additional change into consideration, from 6 April 2021 it will be mandatory to provide the date a car is first registered on the P11D form as well, via a field on the new online and offline forms.

Failure to obtain this data and report it accurately on the P11D form could lead to incorrect company car benefit in kind being calculated.

Link: Tax authority clarifies car tax rules for ultra-low emission vehicles

Despite the impact that Brexit has had on trade in the UK, a new survey conducted by YouGov has found that 38 per cent of small businesses are likely to trade overseas this year.

The study, commissioned by Lawbite, found that of the 791 small businesses questioned two-fifths were planning to trade overseas, which scaled nationally could mean that 2.28 million SMEs are seeking opportunities outside of the UK.

Of those surveyed, more than half of the businesses operating in the manufacturing sector said that they still plan to trade in Europe, with slightly more than a third saying they intended to trade with markets in Asia instead.

While the survey reveals an appetite for overseas trade, it also found that nearly a quarter of businesses would conduct more foreign trade if the legal and regulatory barriers were less complicated.

This is not surprising given that nearly half of all British exporters to the EU said they are facing new complications due to mounting red tape and border disruption, according to a similar survey recently published by the British Chambers of Commerce (BCC).

Despite these complications, a follow-up survey from the BCC also found that 44 per cent of UK exporters to the EU market plan to increase activity in the EU export market, while 27 per cent intend to consolidate their current position rather than grow. Only 13 per cent of the businesses surveyed said they intend to reduce exports to the EU.

Links: More than a third of UK small businesses pushing to trade overseas in 2021