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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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SL repayments: borrower within PAYE: what to do when employment ceases

Employer action - Borrower ceases employment

When an employee ceases employment the employer must consider whether to make an entry in the box headed ‘Enter Y if Student Loan deduction is due to be made’ on form P45.

The employer should enter a ‘Y’ in the box ‘Enter Y if Student Loan deduction is due to be made’ if

  • A Start Notice has been received from HMRC with a start date in the current tax year

Or

  • The employer has previously received a form P45 with a ‘Y’ in the box headed ‘Student Loan Deductions to continue’ And
  • No Stop Notice has been received from HMRC

In all other circumstances no entry should be made.

Notes:

1. The above guidance should be followed regardless of whether deductions have actually been made, perhaps because the employee’s earnings did not exceed the threshold
   
2. The amount of any Student Loan deductions should not be shown on form P45

HMRC action

None.