Start notice now means deduct even if worker denies student loan

The Collection of Student Loans manual answer for employers holding a start notice where the taxpayer says they were never a student has been rewritten, reversing the previous instruction. The old answer told the employer not to start making deductionsGOV, had HMRC staff take the employee's details, check with the Student Loans Company and phone back, and — where the person was not a borrower — told the employer to ignore the Start Notice, file the Stop Notice when it arrived, and confirm the instructions in writingGOV. It presented this as one of the very few scenarios where an employer could stop deductions before a Stop Notice, with written confirmation protecting the employer on a compliance visit.

The new answer removes that entire exception routeGOV. It describes the standard process instead: the Student Loans Company notifies HMRC when a borrower is due to start repaying, HMRC automatically issues a start notice (SL1/PGL1) to the employer, and on receipt the employer starts deductions from the next available pay date until HMRC says to stopGOV. The employer cannot stop deductions because the employee asks it toGOV. The remedy for the person is theirs to pursue: ask for a refund if they think they have overpaid, or contact the Student Loans Company on 0300 100 0611 if they are not a student loan borrower.

The rewrite aligns this FAQ with the companion pages. The start-notice-in-error page states the same rule: disregard a notice only where it refers to someone the employer no longer employs or has never employed; for an actual employee, deductions must start from the next available pay date and cannot stop on the employee's say-so. The when-to-start-deducting page lists the three circumstances for starting deductions — receipt of a Start Notice, a P45 marked to continue deductions, or starter-checklist information — and states that in no other circumstances should the employer commence deductions, with a Start Notice continuing to apply until a Stop Notice is issued.

For payroll operators, the practical change is stark: a start notice naming a current employee is now acted on even if the employee denies ever being a studentGOV — no pause, no HMRC verification call, no written ignore instructionGOV. The dispute moves to the borrower-SLC channel, and deductions run until the Stop Notice arrivesGOV.

Legal basis: deductions on receipt of a Start Notice (forms SL1 and PGL1) under Part 4 of the Education (Student Loans) (Repayment) Regulations 2009 (SI 2009/470), with the notice continuing until a Stop Notice is issued.