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HMRC internal manual

Debt Management and Banking Manual

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HM Revenue & Customs
Updated
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Debt and return pursuit: miscellaneous charges: student loan repayments

The Education (Student Loans) (Repayment) Regulations 2000 changed the nature of higher education funding, following the introduction of a new Student Loan scheme. From April 2000 HMRC became responsible for collecting repayments of Student Loans in respect of the new style loans.

The Regulations mentioned above have now been superseded by The Education (Student Loans) (Repayment) Regulations 2009.

Where the borrower’s tax affairs are handled under PAYE the employer deducts Student Loan repayments from their pay. A borrower who receives a Self Assessment return has to self assess the Student Loan repayments. The net amount due under Self Assessment, after deducting any payments under PAYE, is due as part of the balancing payment.

You can find a detailed overview of the Student Loan Scheme in the CSL Manual.

‘Student Loan’ employers

You can recognise such a ’Student Loan’ employer by the notation in the Information Codes box on the Work Item Details screen on IDMS.

Interest

Interest is chargeable on unpaid Student Loan deductions in the same way as PAYE/NIC.

Enforcement

You may use any of the normal methods of enforcement proceedings to recover student loan deductions (SLd) from employers. Student loan employers follow the same recovery route as other employers. In addition you should note the following:

Forms P100

Forms P100 include SLd. A clerical version will be available on SEES.

If a completed P100 is received without payment, you should:

  • add any SLd to the tax and record the resulting amount in the tax field of the IDMS record Quantified Amount screen
  • make a note of the SLd amount in IDMS Action History
  • issue the warning letter including any SLd separately in the heading.

Forms P101

Where payment of SLd has already been recorded on BROCS the IDMS Establish Debt process will include these payments in the calculation process. Any P101 generated will include an estimate of overdue SLd.

Where you issue form P101 clerically or via the IDMS record Manual Calculation, you should:

  • include in your calculation any known SLd which has not been paid
  • add the SLd amount to the tax amount
  • record the total in the tax field of the record Manual Calculation screen.

Quantified amounts

Following a quantification you should:

  • separately identify any quantified amount of SLd in the warning letter
  • record the combined total of tax and SLd in the tax field of the record Quantified Amount screen
  • make a note of the SLd amount in IDMS Action History.

Recovery of End of Year underpayments

When the P35 has been processed and an underpayment of SLd is shown any tax or NIC already paid will be reallocated to satisfy the student loan underpayment. This reallocation will take place regardless of the state of the employer’s record, so as to leave tax or NIC unpaid.

Where, exceptionally, an employer challenges such a reallocation you should, if pressed, agree to reallocate in accordance with the employer’s requirements. Because reallocations from tax or NIC to SLd are not reversible you will not be able to reflect any reallocation agreed with the employer on the BROCS system and therefore any agreed reallocation will be notional only. You should instead make a prominent note on the case papers of the notional reallocation and note IDMS Action History.