CSLM10011 - FAQs: employers questions and answers: new employee: P45 has a 'Y' in the box - what do I do?

Suggested answer

Start making Student Loan and or Postgraduate Loan (PGL) deductions from the next available pay-day using the correct Loan and or plan type - Plan 1, Plan 2, Plan 4 or PGL. The employee will tell you which loan and or plan type they are on either from completing the new starter checklist or by contacting the Student Loans Company to find out what loan type they have. You can use Plan 1 as a default plan type if needed but this cannot be used for PGL.

Plan 1, Plan 2 or Plan 4 can be collected at the same time as PGL.

Commercial payroll software will enable you to deduct the correct amount on each pay-day.

If you want further information, you can refer to our website .

HMRC action

None.

Notes:

1.	Following receipt of a form P45 with a ‘Y’ in the Student Loan box deductions should commence from the next available pay-day using the correct loan and or plan type. The P45 will not indicate what loan or plan type to use. We would encourage you to ask your employee to complete the starter checklist.
2.	Where the employee has told the employer as part of the ‘Starter Checklist’ gathering exercise that they are a borrower, the employer should also start making deductions from the next available pay day using the correct loan and or plan type. If they also receive a Start Notice SL1 and or PGL1, no action needs to be taken on this Start Notice, which can be filed away.