CSLM17020 – SL repayments: borrower within PAYE: what to do when employment ceases

Employer action - Borrower ceases employment

When an employee ceases employment the employer must consider whether to make an entry in the box headed 'Continue Student Loan Deductions' on form P45.

The employer should enter a 'Y' in the box 'Continue Student Loan Deductions' if

• A Start Notice has been received from HMRC with a start date in the current tax year

Or

• The employer has previously received a form P45 with a 'Y' in the box headed 'Continue Student Loan Deductions' or a form P46 with box D (Student Loans) ticked

And

• No Stop Notice has been received from HMRC

In all other circumstances no entry should be made.

Notes:

1. The above guidance should be followed regardless of whether deductions have actually been made, perhaps because the employee's earnings did not exceed the threshold
   
2. The amount of any Student Loan deductions should not be shown on form P45

HMRC action

You only need to take any additional action if you receive a form P45(3) and there is a 'Y' in the box headed 'Continue Student Loan Deductions'. In these circumstances

• Enter a 'Y' in COP Function MA in the field headed 'CSL’

This will enable the HMRC computer to check whether the entry is compatible with the Student Loan status of the taxpayer.