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HMRC internal manual

Collection of Student Loans Manual

HM Revenue & Customs
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FAQs: borrowers questions and answers: deductions made in error: I do not have a new-style loan

Suggested answer

If you have never received an income contingent loan (loans advanced since August 1998) you should not be making student loan repayments through your employer. If you have an earlier mortgage style loan then any repayments should be being made directly to the Student Loans Company.

Please let me have details of your employer and I will pursue the matter.

HMRC action

Check with the employer

  • If Student Loan deductions are being made

And, if so

  • Why? (For example a Start Notice or a form P45 with an entry in the Student Loans Box)

If deductions appear to be being made in error

  • Contact the Student Loans Company (SLC), explain the problem, and verify whether the taxpayer is a borrower with an income contingent loan
  • If the SLC confirm that the employee does not have an income contingent loan

    • Tell the employer to ignore the Start Notice or P45 instructions and not to make any further deductions
    • Explain that either a Stop Notice or a written notification telling the employer to stop deductions will be issued in due course. This should be filed away with the Start Notice
    • Confirm your instructions in writing and retain a copy of the letter
    • For cases where incorrect or excessive amounts have been deducted under PAYE follow the guidance at CSLM20000 onwards
  • If, exceptionally, the taxpayer is found to be a borrower

    • Tell the employer to continue to make deductions in accordance with the instructions given on the Start Notice
    • Explain the position to the borrower and ask that he / she contacts the Student Loans Company (0300 100 0611) if necessary to pursue the matter. The employer should not phone the Student Loans Company