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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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SL repayments: calculation of loan repayments: when do repayments start?

The precise time when a taxpayer starts making Student Loan repayments will vary, depending on the circumstances, but will never be before 6 April following the date upon which the borrower ceases a course in higher education.

Borrower liable to PAYE

The following factors can influence the date upon which Student Loan repayments start

1. The date of commencement of employment
   
  The borrower will not be identified until the Student Loans Company record matches with a live PAYE record following commencement of employment
2. A Start Notice is issued to the employer
  Following a successful match between the Student Loans Company and HMRC PAYE records a Start Notice is issued to the employer. This instructs the employer to start making deductions from the first available pay day following the Start date shown on the notice
3. A form P45 with a ‘Y’ in the box headed ‘Student Loan Deductions to continue’ is received by the new employer
  If the previous employer has entered a ‘Y’ in the relevant box on form P45 the new employer will start making deductions immediately
4. The employee confirms they are in the process of repaying a loan when the new employer gathers ‘starter checklist’ information
  The new employer will start making deductions from the next available pay day
5. The borrower’s earnings
  If, during a pay period, the borrower’s earnings are at a pro-rata rate in excess of the annual threshold, (that is the proportion of the annual threshold applying to the pay period), the employer will deduct repayments for that pay period

Borrower within Self Assessment

The following factors can influence the date upon which Student Loan repayments start

1. The date of commencement of self employment
   
  The borrower will not be identified until the Student Loans Company record matches with a live SA record
  If the borrower is liable to tax under PAYE then the match will have also been made with the PAYE record
2. Whether the borrower is employed or self employed
  If the borrower is employed repayments will commence in accordance with the PAYE guidance given above
  If the borrower is self employed repayments will be due as part of the balancing payment
3. The borrower’s income is more than the threshold
  No repayments will be due for a tax year if the income for that year is less than the annual threshold