Paying Income Tax when student

robrymond

I recieved my first payslip on Friday and I'm currently in Full-Time education at University.

I worked 12 hours during the first two weeks and paid no National Insurance. However I was taxed £13.80 for Income Tax.

Am I supposed to be exempt from this because my work seems to think I'm not; just the NI contribution, but I assumed I was exempt from both.

I earnt £69.36 gross pay.

flossy_splodge

Nice try! You're not exempt - no one is. You get the same personal allowance given to every UK citizen.
HOWEVER, you can have the advantage of receiving your pay 'gross' ie with no tax deducted if you fill in the appropriate form and then manage to get your employer to action it correctly :rotfl: But if you earn more than your personal allowance then you will have to pay tax like the rest of us poor suckers.
So the upshot is, if you are sure you will earn less than the current years personal allowance,
Income Tax Allowances table

Income tax allowances

2007-08 (£)

2008-09 (£)

Personal allowance

5,225

6,035

Personal allowance for people aged 65-74 (1)

7,550

9,030

Personal allowance for people aged 75 and over (1)

7,690

9,180

Married couple's allowance (born before 6th April 1935 but aged under 75) (1) (2)
6,285
6,535
Married couple's allowance - aged 75 and over (1) (2)
6,365
6,625

Income limit for age-related allowances

20,900

21,800

Minimum amount of married couple's allowance

2,440

2,540

Blind person's allowance

1,730

1,800

So from April 2008, if you are under 65 you get to earn £6035 for the YEAR before you owe any tax. It will go up again in April. Last years is shown above.
Hope this helps.:D

flossy_splodge

Sorry the table did not retain its formatting. The top figure in each catefory is for 2007/2008 and the lower one for 2008/2009.:eek:

wildbri

It seems that you are being taxed at 20% which is the basic tax, but you will have a tax free allowance of about £6000 pa before tax comes in. Call in your local tax office and explain, dont worry your tax will be refunded, think of it as savings...... regards bri

helenshappyhens

Is this your first and only job since April Tax year started?
Your employer does not know what you have already earnt this tax year so cant give you your freepay imediatelly, for all they know you may actually owe the tax man money.

If you havent had a job since april so no P45 to give your new employer then ask them for a P46 to fill in. This once completed will enable them to get the correct tax code for you and then you will get your 'freepay' correctly.

If you earn that much every 2 weeks you wont be paying tax.

CLAPTON

robrymond wrote: »

I recieved my first payslip on Friday and I'm currently in Full-Time education at University.

I worked 12 hours during the first two weeks and paid no National Insurance. However I was taxed £13.80 for Income Tax.

Am I supposed to be exempt from this because my work seems to think I'm not; just the NI contribution, but I assumed I was exempt from both.

I earnt £69.36 gross pay.

Students are not exempt from NI or tax but you earn insufficient to pay any.

You should have filled in a P46 when you started your job.

They should have put you on a 603Lwk1 tax code but they have incorrectly put you on BR.

BR means that you are taxed at 20% on everything.

Once the P46 is sent to the HMRC then this will be corrected to 603L (cumulative).

Did you fill in a P46?

And 'received' is spelt thus.
I'm assuming that you haven't worked previously this tax year.

robrymond

I haven't work previously this year or any year for that matter under a PAYE system. I'm sure I filled in a form, ticked a box to say I hadn't worked and then they took it away with my contract and I think it was the P46.

Could it be that this hasn't been processed yet as I started early to mid October and this payment is up until 25th October.

I'm not great with the tax stuff, but I think that I understand what everyone has put, so thanks!

mtem74

ignore the fact you are a student.

Work out what your annual wage will be. If it's less the the personal allowance for the year then you won't pay tax.

Get in touch with the tax office to see if they can sort your affairs for you.
Noramlly the employer can use the P46 to hint at what tax code you should be one but the tax office will tell them the right one. Sounds like they haven't realised or just don't know what they are doing (if you've ticked the right box that is)

If this is your only job this year (since 6 April 08) then once your coding is sorted out by the tax office and notified to your employer. You'll get any excess tax paid back via your wages. If not you'll have to wait until after 6 April 09 to claim a refund from the tax office

robrymond

:I'll look into it when I next am in work. Thanks

jem16

CLAPTON wrote: »

You should have filled in a P46 when you started your job.

They should have put you on a 603Lwk1 tax code but they have incorrectly put you on BR.

In the absence of both a P45 and a P46 the correct code to use is BR.