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HMRC internal manual

Collection of Student Loans Manual

From
HM Revenue & Customs
Updated
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Compliance: employer compliance: recovery of unpaid student loans

This subject is presented as follows

Deductions by employers

Employers include the total figure for Student Loan deductions on form P35. The amount deducted for individual employees is automatically reported to the Student Loans Company on processing the form P14 onto the Employer Business Service (EBS).

East Kilbride Student Loans Unit

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Recovery of Student Loans

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Role of Employer Compliance

Employer Compliance are responsible for dealing with employers who

  • Do not enter the full amount of loans deducted on the forms P35 and P14
  • Fail to deliver the return

Or

  • Fail to deduct or incorrectly deduct repayments

Where deductions remain unpaid, you should normally seek to recover by a Class 6 settlement. Formal recovery will

  • Only be required where the employer refuses to settle an established debt

And

  • Be extremely rare because the amounts which have been deducted will have been established from the employer’s own records

If formal recovery is required Employer Compliance can make Regulation 62 determinations.

Regulation 62 determinations

Regulation 62 determinations will only be raised by Employer Compliance staff. Under Regulation 62 of The Education (Student Loans)(Repayment) Regulations 2009, only an authorised officer can make a determination on the employer. Regulation 62 determinations must not be confused with Regulation 80 Income Tax (Pay As You Earn) Regulations 2003 determinations which are raised to collect the tax that is due from an employer but remains unpaid.

A Regulation 62 determination is made by letter. A payslip must be included with the determination.

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Action by SAFE nominee

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Appeal against a Regulation 62 determination

Section 55 TMA 1970 does not apply to Regulation 62 appeals. You must stand over all the tax charged immediately an appeal is received and whilst you may accept a payment on account you cannot insist on one. If an employer offers a payment on account, accept it.

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Amendment to a Regulation 62 determination on appeal

An appeal must be settled under S54 TMA 1970 if a determination is increased / decreased on appeal

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End of Year Sections

Other than capturing the total Student Loan deductions figure on forms P35, End of Year sections will have no involvement with Student Loan End of Year matters.

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P35 received after Regulation 62 determination made

If a Regulation 62 determination has been made, a form P35 subsequently received should be referred to the office that raised the Regulation 62 to ensure that payment is not made against both the Regulation 62 determination and the P35. Where the P35 is processed after amendments for matching entries on the P380A, no action is required for the forms P14 as the deductions that were manually recorded on the borrower’s record cannot be overwritten by subsequent processing.

Penalties

Where a penalty is chargeable (based on the number of employees) for a failure by an employer to return IT and NICs deductions no penalty is due in respect of Student Loan deductions.

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