FAQs: employers questions and answers: new employee: P45 has a 'Y' in the SL box - t/p is not a borrower
If the form P45 has a ‘Y’ in the Student Loan box you should start making deductions from the next pay-day.
However, give me full details of the employee and I will check out the position and phone back.
- Contact the Student Loans Company and verify whether the taxpayer is a borrower
- If the taxpayer is a borrower - tell the employer to make deductions, using the HMRC Basic PAYE Tools (https://www.gov.uk/government/publications/basic-paye-tools-user-guide) or approved payroll software from the next pay-day
If the taxpayer is not a borrower
- Tell the employer to ignore the ‘Y’ on the form P45 and not to make any deductions
- Explain that a Stop Notice should be issued in due course. This should be filed away
- Confirm your instructions in writing and retain a copy of the letter
|1.||This is one of the very few scenarios where an employer can stop making deductions before a Stop Notice is received.|
|2.||The need to confirm the instructions to the employer in writing is to protect the employer in the event of a compliance visit.|