CSLM2030 – about CSL: overview of student loans: role of employer

It is the employers’ role to

• Start and cease deduction of Student Loan repayments following the receipt of Start Notices and Stop Notices from HMRC, when a form P45 is received with a ‘Y’ in the SL box or when the employee ticks box D (Student Loans) on a P46
• Calculate the weekly or monthly amount of Student Loan repayments in accordance with the Student Loan Deduction Tables. Copies of the tables are available from the Employer’s Orderline)
• Deduct the Student Loan repayments from the borrower's pay
• Account for the Student Loan amounts deducted to Banking Operations along with tax and NIC
• Include the amount of Student Loan deductions on forms P11, P14, P35 and P60
• Ensure that in leaver cases, form P45 is marked with a 'Y' in the SL box when a Start Notice (SL1) has been received (or box D of a P46 has been ticked), but no Stop Notice (SL2), regardless of whether or not any Student Loan repayments have been deducted, (for example, because of the level of the borrower's earnings)

Identifying borrowers who are liable to make repayments

This is not the responsibility of the employer.

The responsibility for identifying borrowers lies with the Student Loans Company who will inform HMRC as part of the matching exercise.

If a successful match is made with a PAYE record a Start Notice is issued to the employer.

The employer must commence making deductions of Student Loan repayments, (subject to the level of income), when, either

• A Start Notice is received from HMRC

Or

• A form P45 is received with a 'Y' in the box headed 'Continue Student Loan Deductions'

Under no other circumstances should an employer start making Student Loan deductions.

Similarly, the employer should continue making Student Loan deductions, subject to the income threshold until either

• A Stop Notice is received from HMRC

Or, exceptionally

• Specific authority is received from HMRC to stop making deductions

Deductions made by the employer

On receipt of a Start Notice (SL1), the employer makes deductions in accordance with the Student Loan Deduction Tables. Copies of the tables are available from the Employer’s Orderline.

Student Loan deductions are

• Non - cumulative
• Deducted from gross pay alongside tax and NIC

And

• Recorded separately on the P11WS

Full details of the employer's responsibilities are given in CSLM17000 onwards.

Handling employers' queries

If the employer is a new employer they should contact the NESI Help Line on 0845 607 0143.

In other cases they should contact the Employers Help Line on 08457 143 143.

Note: An employer should not contact the Student Loans Company under any circumstances. If an employer queries a loan on behalf of an employee, then the employee should contact the Student Loans Company.