Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Collection of Student Loans Manual

Compliance: employer compliance: introduction

From April 2000 HMRC became responsible under The Education (Student Loans) (Repayment) Regulations 2000 for collecting repayments in respect of income-contingent Student Loans, on behalf of the Department for Business Innovation & Skills (BIS).  These are now known as Plan 1 loans.

A new type of repayment loan was introduced in 2013. These loans are known as Plan 2 loans.  Plan 2 loans operate in the same way as Plan 1 loans although the amount that can be borrowed is higher and the threshold at which repayment starts is also a higher threshold.

For borrowers who receive earnings liable to Class 1 NIC, Student Loan repayment deductions are made by employers when earnings exceed the annual threshold.

Employers account to HMRC for these deductions using the PAYE system.

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

Detailed guidance on the responsibilities of the employer, including deductions and record keeping is contained in CSLM2030 and in the section CSLM17000.

Borrowers who receive an SA return have to self-assess their loan repayments, including any earnings that have been subject to repayment deductions by their employer. Guidance on Student Loan compliance in SA cases and the borrower’s obligations are covered in the section CSLM8500.

Note: Reference to P14/P35 only applies to years before the introduction of Real Time Information (RTI). For RTI years, reference should be made to Full Payment Summary (FPS) submission.

For periods where RTI applies, RTI was first introduced in April 2012 as a pilot with volunteer employers. All employers started reporting PAYE information under RTI from April 2013, unless HMRC gave a specified later date.