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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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SL repayments: underpayments and overpayments: incorrect SL deductions - employer error

This subject applies to Student Loan deductions made in error, that is, when there was no valid authority to make deductions.

This situation could arise if the employer

  • Applies a Start Notice to the wrong employee

Or

  • Continues to make Student Loan deductions after a Stop Notice has been received

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Error discovered in year and borrower still an employee

If the error is discovered in year (or before the End of Year forms and final remittances have been sent to HMRC) and the borrower is still an employee, the employer should

  • Repay the employee, showing the amount of the repayment as a minus on the employee’s payslip

And

  • Make any necessary adjustment to the amounts paid to HMRC when the next remittance is sent. (Note: In year remittances lump Student Loan deductions with tax)

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Error discovered after the end of the year or after the borrower has left

If the error is discovered after the End of Year forms have been submitted to HMRC, or after the borrower has left this employment, HMRC will make any repayment due direct to the borrower. The employer does not need to take any further action to rectify the error.

East Kilbride Student Loans Unit will handle all cases where Student Loan deductions have been made incorrectly. Under no circumstances should the local office attempt to repay Student Loan deductions. The local office should refer all correspondence and telephone calls to East Kilbride Student Loans Unit.

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Action by East Kilbride Student Loans Unit

Once East Kilbride Student Loans Unit have confirmed that the Student Loan deductions were made in error they will issue a manual repayment direct to the taxpayer using existing clerical and supervisory procedures.

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