CSLM20015 - SL repayments: underpayments and overpayments: incorrect deductions - start notification error
This subject applies to Student Loan deductions made by an employer who has received a formal notification to start making deductions but the taxpayer is not a borrower. This could happen where
- The previous employer has incorrectly put a ‘Y’ in the box ‘Student Loan Deductions to continue’ on the form P45
- There has been a mismatch and a Start Notice has been issued for the wrong taxpayer
Error discovered in year and borrower still an employee
If the error is discovered in year (or before the End of Year forms and final remittance have been sent to HMRC) and the borrower is still an employee the employer can be asked to
- Repay the employee, showing the amount of the repayment as a minus on the employee’s payslip
- Make any necessary adjustment to the amounts paid to HMRC when the next remittance is sent. Note: In year remittances lump Student Loan deductions with tax
In these sorts of situations HMRC can not insist that the employer refund the deductions. If the employer is unwilling to make the refund the case should be referred to East Kilbride Student Loans Unit as below.
Error discovered after the end of the year or after the borrower has left
If the error is discovered after the End of Year forms have been submitted to HMRC, or after the borrower has left this employment, HMRC will make any repayment due direct to the borrower. The employer does not need to take any further action to rectify the error.
East Kilbride Student Loans Unit will handle all cases where Student Loan deductions have been made incorrectly. Under no circumstances should the local office attempt to repay Student Loan deductions. The local office should refer all correspondence and telephone calls to East Kilbride Student Loans Unit.
Action by East Kilbride Student Loans Unit
Once East Kilbride Student Loans Unit have confirmed that the Student Loan deductions were made in error they will issue a manual repayment direct to the taxpayer using existing clerical and supervisory procedures.
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- (This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Action by local office
The local office must ensure that the borrower’s PAYE Service record is kept updated with details of any repayments of Student Loan deductions. On receipt of form SL5R from East Kilbride Student Loans Unit you must
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
