Payroll Legislation

How Do You Make Student Loan Deductions?

Legislation

How Do You Make Student Loan Deductions?

Due Date

Ongoing

Summary

Incorrect deductions

It has been brought to the attention of HMRC that there’s instances where the FPS shows student loan deductions had been applied incorrectly.

Student loan deductions are not due on:

  • Occupational pension scheme payments
  • Payments that are subject to the OPW (Off-Payroll Working) rules

If the mistake is made, please amend it immediately.

Student loan refund

HMRC may write to tell an employer to stop taking current year deductions and refund through their payroll, where student/ postgraduate loan deductions have been taken incorrectly within the current tax year.

For previous tax years, the individual needs to either call or write in with their bank account details to allow HMRC to process the refund.

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