CSLM20020 - SL repayments: underpayments and overpayments: employer over-deducts loan repayments

There may be occasions where due to an error the employer makes an excessive Student and or Postgraduate Loan deductions from a borrower’s pay, for example, if the Student or Postgraduate Loan Deduction Tables have been misunderstood.

Note:  Deductions should always be made in accordance with the Student and Postgraduate Loan Deduction Tables. Employers cannot deduct more student loans than is required in order for the borrower to pay off the loan quicker. If the borrower wishes to make additional payments this should be arranged with the Student Loans Company. Such payments would, however, be in addition to, and not instead of, payments deducted by the employer from earnings.


Error discovered in year

If the error is discovered in year, or before the End of Year forms and final remittance have been sent to HMRC, 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 Full Payment summary (FPS) is sent.


Error discovered after end of year

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.