CSLM20015 | SL repayments: underpayments and overpayments: incorrect deductions - start notification error

This subject applies to Student and or Postgraduate 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

Or

• 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

And

• Make any necessary adjustment to the amounts paid to HMRC when the next monthly Full Payment Submission (FPS) is sent.

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.