When an employer receives a stop notice (SL2 or PGL2) to cease deduction of an employees Student Loan or Post Graduate Loan, the notice should be actioned by the employer from the next available pay date. If, for whatever reason the stop notice is not actioned by the employer, this will obviously result in an over deduction of the loan and adjustments will be required to be made.
To increase employer compliance and reduce the amount by which employees overpay their student loan. From September 2019, HMRC will begin sending employers Generic Notification Service (GNS) messages who continue to take Student Loan or Postgraduate Loan (PGL) deductions from their employee after a stop notice was issued.
Employers that continue to take deductions following the issue of a stop notice, will receive a maximum of 2 GNS message prompts each tax year for each employee and loan type they continue to deduct incorrectly.
The GNS messages will work in the same manner as other Student Loan/PGL prompts and will be delivered via the employers PAYE online accounts.
Depending on whether the employee was a Student Loan borrower, a PGL borrower or they never had a loan, there will be 8 potential notices that an employer may receive.
The GNS messages will be titled:
- Student Loan stopped borrower Prompt 1
- Student Loan stopped borrower Prompt 2
- Postgraduate Loan stopped borrower Prompt 1
- Postgraduate Loan stopped borrower Prompt 2
- Student Loan non borrower Prompt 1
- Student Loan non borrower Prompt 2
- Postgraduate Loan non borrower Prompt 1
- Postgraduate Loan non borrower Prompt 2