Overview #
Occasionally, student pr postgraduate loans may be deducted in error. Follow this guide if you receive a notice from HMRC to stop and/or refund loan deductions.
Determine and correct the error #
There are 2 possibilities for a student or postgraduate loan being operated in error:
- Previous P45 error in the Tax section
- Employee declaration error in the Tax (Employee-specified) section
Navigate to Employee Setup > Update the employee
Identify the source of the error in either the Tax or Tax (Employee-specified) sections. In the example below a Postgraduate loan was incorrectly declared by the employee:
Make the necessary corrections, then click Update.
Do not make any other changes – an HMRC start notice may have already been received, for example, to start a student loan.
Process refund #
Only follow this step if you have been instructed by HMRC to refund any deductions.
First, confirm the year-to-date (YTD) amount which has been deducted in error. The easiest way is to click on the View State button at the bottom of the employee record:
On the next view, carefully locate the SL (student loan) state. This shows the “SL deducted, YTD” (Student Loan) and “PGL deducted, YTD” (Postgraduate Loan) Year to date (YTD) values. The example below shows both being £8.00 year to date:
Pay Item Editor > Click Show All to show the SL Pay Item (normally hidden).
Add a negative value for the amount you wish to refund.
Click Update and carefully check that the refund is appearing as a positive payslip entry:
After the payroll is approved, the refund value will automatically be zeroed and not operate in future pay runs.