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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: maintaining records

The Collection of Student Loans scheme does not introduce any new forms for completion by the employer, although the employer will receive new forms and guidance material from HMRC.

In addition, changes have been made to existing forms to accommodate Student Loans. The employer will only have to make additional entries on these forms if completing a manual payroll and a borrower is employed.

Most employers will now use either specialised payroll software or (for employers with 9 or fewer employees) will use the HMRC Basic PAYE Tools software, both of which will calculate and record the deductions automatically.

Forms

Three forms have been introduced that will affect employers. Brief details of their use are given below.

  • Form SL1 - Start Notice - issued automatically to the employer when a borrower is identified and matched with the PAYE database
  • Form SL2 - Stop Notice - issued automatically to an employer when deduction of Student Loan Repayments is to cease
  • Form SL3 - Student Loan Deduction Tables - These are available from the HMRC website at

Existing forms

Amendments have been made to the following existing forms to enable the employer to handle the Collection of Student Loans scheme

  • P30B - Payslip

    • The employer lumps Student Loan deductions with tax deducted during the period
  • P32 - Employer’s Payment Record - ‘Student Loan Deductions’

    • Employer enters, in the box headed ‘Student Loan Deductions’, the amount of Student Loan deductions made during the period and included in each payment to HMRC. (Whole pounds only)
  • P45 - Employee Leaving Details - ‘Student Loan Deductions to continue’

    • Employer completes box headed ‘Enter Y if Student Loan deduction is due to be made’ if form SL1 received but no form SL2 received (whether or not deductions have actually been made)
  • P60 - Certificate of pay and tax and so on deducted - ‘Student Loan Deductions in this employment’

    • Employer enters the total amount of Student Loan deductions in this employment
  • Wages slip - Various designs

    • Whatever design is used the employer must show Student Loan deductions separate from other deductions made from pay