CSLM9040 - Compliance: employer compliance: recovery of unpaid Student and or Postgraduate loans
References on this page to P14/P35 only applies to years before the introduction of Real Time Information (RTI). For RTI years, reference should be made to Full Payment Summary (FPS) submissions.
This subject is presented as follows
Deductions by employers
East Kilbride Student Loans Unit
Recovery of Student and or Postgraduate Loans
Role of Employer Compliance
Regulation 62 determinations
Action by SAFE nominee
Appeal against a Regulation 62 determination
Amendment to a Regulation 62 determination on appeal
End of Year Sections
P35 received after Regulation 62 determination made
Penalties
Deductions by employers
Employers include the total figure for Student Loan and or Postgraduate Loan deductions on form P35 or FPS. The amount deducted for individual employees is automatically reported to the Student Loans Company on processing the form P14 onto the Employer Business Service (EBS).
East Kilbride Student Loans Unit
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Recovery of Student and or Postgraduate Loans
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Role of Employer Compliance
Employer Compliance are responsible for dealing with employers who
- Do not enter the full amount of loans deducted on the forms P35 or FPS and P14
- Fail to deliver the return
Or
- Fail to deduct or incorrectly deduct repayments
Where deductions remain unpaid, you should normally seek to recover by a Class 6 settlement. Formal recovery will
- Only be required where the employer refuses to settle an established debt
And
- Be extremely rare because the amounts which have been deducted will have been established from the employer’s own records
If formal recovery is required Employer Compliance can make Regulation 62 determinations.
Regulation 62 determinations
Regulation 62 determinations will only be raised by Employer Compliance staff. Under Regulation 62 of The Education (Student Loans)(Repayment) Regulations 2009, only an authorised officer can make a determination on the employer. Regulation 62 determinations must not be confused with Regulation 80 Income Tax (Pay As You Earn) Regulations 2003 determinations which are raised to collect the tax that is due from an employer but remains unpaid.
A Regulation 62 determination is made by letter. A payslip must be included with the determination.
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Action by SAFE nominee
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Appeal against a Regulation 62 determination
Section 55 TMA 1970 does not apply to Regulation 62 appeals. You must stand over all the tax charged immediately an appeal is received and whilst you may accept a payment on account you cannot insist on one. If an employer offers a payment on account, accept it.
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Amendment to a Regulation 62 determination on appeal
An appeal must be settled under S54 TMA 1970 if a determination is increased / decreased on appeal
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End of Year Sections
Other than capturing the total Student and or Postgraduate Loan deductions figure on forms P35 or FPS, End of Year sections will have no involvement with Student and or Postgraduate Loan End of Year matters.
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P35 or FPS received after Regulation 62 determination made
If a Regulation 62 determination has been made, a form P35 or FPS subsequently received should be referred to the office that raised the Regulation 62 to ensure that payment is not made against both the Regulation 62 determination and the P35 or FPS. Where the P35 or FPS is processed after amendments for matching entries on the P380A, no action is required for the forms P14 as the deductions that were manually recorded on the borrower’s record cannot be overwritten by subsequent processing.
Penalties
Where a penalty is chargeable (based on the number of employees) for a failure by an employer to return IT and NICs deductions no penalty is due in respect of Student and or Postgraduate Loan deductions.
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