CSLM10012 - FAQs: employers questions and answers: P45 has a 'Y' in the SL box - t/p is not a borrower
Suggested answer
If the form P45 has a 'Y' in the Student Loan box you should start making deductions from the next pay-day.
However, give me full details of the employee and I will check out the position and phone back.
HMRC action
- Contact the Student Loans Company and verify whether the taxpayer is a borrower
- If the taxpayer is a borrower - tell the employer to make deductions, using the HMRC Basic PAYE Tools (www.hmrc.gov.uk/paye/tools/basic-paye-tools.htm) or approved payroll software from the next pay-day
- If the taxpayer is not a borrower
- Tell the employer to ignore the 'Y' on the form P45 and not to make any deductions
- Explain that a Stop Notice should be issued in due course. This should be filed away
- Confirm your instructions in writing and retain a copy of the letter
Notes:
| 1. | This is one of the very few scenarios where an employer can stop making deductions before a Stop Notice is received. |
| 2. | The need to confirm the instructions to the employer in writing is to protect the employer in the event of a compliance visit. |
