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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 deductions - start notification error

This subject applies to Student Loan deductions made by an employer who has received a formal notification to start making deductions but the taxpayer is not a borrower. This could happen where

  • The previous employer has incorrectly put a ‘Y’ in the box ‘Student Loan Deductions to continue’ on the form P45

Or

  • There has been a mismatch and a Start Notice has been issued for the wrong taxpayer

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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 remittance have been sent to HMRC) and the borrower is still an employee the employer can be asked to

  • 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 monthly Full Payment Submission (FPS) is sent. In these sorts of situations HMRC can not insist that the employer refund the deductions. If the employer is unwilling to make the refund the case should be referred to East Kilbride Student Loans Unit as below.

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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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