Hamish Foxley
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Advanced pay for holiday - Student loan threshold reached
I have a client who regularly advance employee pay when they go on holiday (Weekly wages calculations). Our system will correctly calculate NI based on half the pay, then double the result, and has done so for many many years. The client recently had a double week advanced pay for a person with a student loan charge. Our system applied the same assumption, dividing the pay by two and decided that the student loan threshold was not reached on that basis (his pay is normally just under the threshold), so took no STL charge. They later received a letter from HMRC to state that this employee's pay was over the threshold and should have attracted STL. I can find no element in the RTI spec for the FPS transmission that indicates to HMRC that an advanced pay has been given, so I guess they see the total pay and view the STL as missing on that basis. I can find no guidance on this anywhere. Does anyone know where I should be looking? Are we right to divide the pay for such charges? Thanks.