I have recently taken on a new client who is starting a new business, but has hitherto been employed. She started work in 2005, and has more or less never had the correct code, and has never completed a tax return. Needless to say, she has overpaid tax in several years. I am therefore working backwards to try to resolve this. I submitted information re 2009/10 and HMRC asked for a tax return, and voluntarily seemed to look at 2008/09, and sent a refund. The problem is that my client's employer for part of 2008/09 and the first part of 2009/10 did not make any student loan deductions, despite the P45 from the previous employer checking the box, and checking the box themselves on the P45 they produced. My client therefore faces a catch up on the student loan repayments of about £2,000 even after the tax refunds and can't afford it, having just given up her job to pursue the new business. We haven't told HMRC or the student loans company yet. My client naturally feels aggrieved with her old employer, but I cannot see that contacting them is likely to get far; they will argue that my client has not suffered any loss. Are HMRC likely to be sympathetic and allow time to pay? Does anyone have any suggestions as to how to proceed?