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HMRC internal manual

Collection of Student Loans Manual

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HM Revenue & Customs
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Compliance: borrowers compliance: calculating penalties

Late return and incorrect return penalties are based on the difference between the Student Loan repayments correctly due for a year of assessment and that paid or returned regardless of whether the amount correctly due results in the loan being over repaid.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Example

Loan outstanding at 31 January following a year of assessment was £3500 before crediting the payment for that year. The amount of Student Loan repayments returned for that year was £1000 but the correct repayment, based on total income for the year, was in fact £4000. Strictly, a Schedule 24 penalty can be charged on £3000 (£4000 - £1000).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

(This content has been withheld because of exemptions in the Freedom of Information Act 2000) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) CSLM8560(This content has been withheld because of exemptions in the Freedom of Information Act 2000) CSLM8565(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

The guidance in the Enquiry Manual (EM) at EM6052 onwards concerning abating penalties and the limits at EM6002 apply to Student Loan repayments. Where additional income or late returned income is liable to a penalty the abatement and de minimis limits should be calculated using the total for tax, Class 4 NICs and Student Loan repayments. It may be appropriate to apply different abatement factors to repayments attributable to the fact that liability to make repayments had not been returned but the de minimus limit is still applied to the combined total.

The letter of offer requires amending where a penalty on Student Loan repayment liability is included. See CSLM8575 for the amended wording.