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HMRC internal manual

Collection of Student Loans Manual

HM Revenue & Customs
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SL repayments: order of deduction: introduction

In the majority of cases the order in which Student Loan deductions fit with otherdeductions should give the employer no problems. Student Loan deductions are deducted atthe same time as tax and NIC, (and are not a deduction for tax and NIC purposes).

However, there may be a small number of cases where, in addition to Student Loandeductions the employer is obliged to consider a Court Order, for example, an Attachment of Earnings Order, (AEO), or a Deduction of Earnings Order (DEO).

The order and amount of Student Loan deductions varies depending upon

  • Whether the AEO / DEO is a priority order or a non-priority order
  • Where a priority order is based on specific or percentage amounts
  • Whether the total deductions, including Student Loans deductions, breach the protected earnings level stipulated in the Court Order