CSLM8510 - Compliance: borrowers compliance: deduction from earnings
If an employer receives a ‘start notice’ for an employee on a form SL1 and or PGL1 they must deduct student and or postgraduate loans repayments from the employee’s earnings.
They must continue to make deductions until they receive a ‘stop notice’. If an employer fails to make these deductions, no credit is given against the loan. HMRC cannot recover the amounts that should have been deducted directly from the employee unless they are within Self Assessment. However, an SA return should not be issued to recover repayments that should have been deducted by an employer.
Borrowers have to provide certain information to the Student Loans Company to enable a start notice to be issued to an employer at the appropriate time. Unless borrowers are within Self Assessment, they are not obliged to notify HMRC that they have a student loan and are liable to make repayments.
When they start employment, borrowers must tell their employer if they are liable to make student and or postgraduate loan repayments. If they will only become liable to make repayments the following April (CSLM2015) no declaration is required.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
The rules concerning deduction of repayments from earnings are dealt with in more detail in the section ‘Borrower within PAYE’ at CSLM17000 onwards.