Student working over the summer? Make sure you pay the right tax

Former_MSE_Archna · 24 July 2007 at 12:20PM

If you're a student working over the summer to earn some cash to keep you afloat or fund those boozey nights out, make sure you're paying the right amount of tax.

What to do

You and your employer need to fill out a P38 form, providing you're only working during the holidays and going to earn less than £5,225 over the year. This is a declaration of your student status and will ensure you won't be placed on an emergency tax code and will therefore be taxed the right amount of money.

The tax rules

Students earning under £5,225 will not pay income tax.
Those earning above, will have to make payments.
The student must be in full time education at the time of working and plan to be in full time education by the end of the next tax year – 5 April.
Students will not pay any National Insurance Contributions (NICs) if they are paid less than £100 a week or £435 a month.
But if the student is paid more than this amount, they will pay National Insurance of 11% on any salary over this amount up to £670 a week or £2904 a month plus 1% on any amount above these figures.

chocolatechococat · 24 July 2007 at 10:46PM

I'm a full time mature student (36). Can I apply for this tax break or is it just younger students?

Suzkin · 25 July 2007 at 12:47AM

Hi. Does this mean that if students get paid less than £100 per week, that their NI contributons are 'paid' for them (i.e. that they are exempt), or will they still need to pay them for the missing weeks/months/years at some time in the future?

Savvy_Sue · 25 July 2007 at 12:50AM

It applies to anyone who meets the criteria listed.

So, NOT to anyone working both term time and holidays.

And NOT to anyone expecting to earn more than the personal allowance.

I'm fairly sure your undergraduate loan isn't classed as income, but certain forms of postgraduate funding are.

dotty_totty · 25 July 2007 at 9:21AM

Can anyone explain what my daughter should be taxed then? She is in full time education, just finished A levels but returning in september to complete a year long Art Foundation degree at college. She has worked in McDonalds and at Aintree racecourse, and is currently in Boots. She has always paid tax in all her jobs but rarely earns over £100 per week, usually in the region of £60-£70. What can she earn before being taxed and is there any way she can get a refund if she's overpaid? As she is eighteen now, the taxman wont talk to me on the phone and they just seem to fob her off when she's phoned before.

Ollieda · 25 July 2007 at 10:42AM

Take note: YOUR STUDENT TAX ALLOWENCE IS ONLY FOR YOUR PRIMARY JOB

If you have two jobs (for instance 1 during term-time at uni, then 1 when you come back home in the holidays) you will only be allowed you tax allowence (i.e. not paying tax) on the one that you list as your primary job, this is selected when you fill out your P38.

Your other jobs will be charged at 22% tax, which of course you can claim back if you do not earn over your personal allowence (£5,225) before 5th April

Just one problem I have with this... everyone seems to just say "you can get claim it back at the end of they year" anyone know how to do this? I recently recieved a letter from Inland Revenue saying that I had paid too much tax last year, rather honest of them, except that I hand't paid any tax! It seemed a bit odd getting the letter in July if the tax year ends in April. Does anyone know of how you go about claiming back tax before recieving the letter if you know you have paid too much?

mooandmae · 25 July 2007 at 11:13AM

In reply to dotty totty, your daughter can write in to her tax office to give permission for you to act on her behalf, Your daughter(and anyone else) can make a claim for the previous 6 years. She will need to send in to her tax office all P60's and/or P45's to state her earnings, it's best though if she contacts her tax office to find out if any bits are missing. if there are gaps in her employments she will need to state that she was in education.

mooandmae · 25 July 2007 at 11:18AM

in reply ot ollieda, the latter was sent in July as it takes a while for your tax officeto get all the P60 details for every one and then check to see who has under/over paid. If the letter doesn't ask for you to do anything it should mean that a repayment will follow very shortly. Check the letter to make sure its not requesting any info(p60 or P45's). If your still unsure or want to check to see if any paymnets on its way give your tax office a call. There should be a telephone number on the top of the letter. You will need your national insurance nmuber.

Savvy_Sue · 25 July 2007 at 11:24AM

Suzkin wrote: »

Hi. Does this mean that if students get paid less than £100 per week, that their NI contributons are 'paid' for them (i.e. that they are exempt), or will they still need to pay them for the missing weeks/months/years at some time in the future?

They won't HAVE to pay them in the future, but you will get regular letters inviting you to 'make up' any missing years. It's fine to have a few missing years but too many will have an impact on your state pension.

Note that years you make up voluntarily won't count for claiming JSA, so it's not a short-term step.

And guessing that you are female, if you are ever claiming Child Benefit and not earning enough to have to pay NI, then you are covered by HRP: Home Responsibilities Protection.

skipkoo · 25 July 2007 at 11:25AM

Ollieda wrote: »

Take note: YOUR STUDENT TAX ALLOWENCE IS ONLY FOR YOUR PRIMARY JOB

If you have two jobs (for instance 1 during term-time at uni, then 1 when you come back home in the holidays) you will only be allowed you tax allowence (i.e. not paying tax) on the one that you list as your primary job, this is selected when you fill out your P38.

Your other jobs will be charged at 22% tax, which of course you can claim back if you do not earn over your personal allowence (£5,225) before 5th April

Please note If you know that while doing your 2 jobs within the year you will be unlikely to earn more than your personal allowance, £5225, you can contact your local tax office and ask them to split the code between your 2 jobs.
S

terryjohn5k · 25 July 2007 at 11:47AM

chocolatechococat wrote: »

I'm a full time mature student (36). Can I apply for this tax break or is it just younger students?

EVERYONE PAYS TAX FROM CRADLE TO GRAVE. IF YOU EARN LESS IN A YEAR THAN THE PERSONAL ALLOWANCE ( THIS YEAR ITS £5225.00 FOR A PERSON UNDER 65) YOU SHOULD NOT PAY TAX. NO ONE IS EXEMPT FROM PAYING TAX NOT EVEN STUDENTS. IF ANYONE WORKS ON AND OFF WITHIN A TAX YEAR AND HAS PAID TAX BUT EARNED LESS THAN THE PERSONAL ALLOWANCE THEN AT THE END OF THE TAX YEAR THEY SHOULD SEND IN ANY P45'S AND P60'S FOR THAT TAX YEAR TO THEIR TAX OFFICE WHERE THEY CAN CALCULATE IF A REFUND IS DUE. (YOU CAN CLAIM UP TO SIX YEARS BACK) THEY WILL SEND ALL PAPER WORK BACK AND A CHEQUE WOULD FOLLOW. TO STOP FROM PAYING BASIC RATE (BR) WHEN ANYONE FIRST STARTS A NEW JOB THEY SHOULD GIVE THEIR P45 FROM THEIR PREVIOUS EMPLOYER TO THEIR NEW EMPLOYER, IF THEY DO NOT HAVE A P45 THEN THEY SHOULD COMPLETE A P46 TOGETHER WITH THEIR NEW EMPLOYER WHO WILL THEN SEND IT OFF TO THE TAX OFFICE.

Student working over the summer? Make sure you pay the right tax

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