Tax, National Insurance entitlement query

SanTheMan

Hi, could someone please clarify my situation as i am a bit confused!

I am currently in the 2nd year of my degree and work 8 hours a week earning £6.10 an hour which is about £50 for the day.

What i would like to know are the conditions for how much national insurance i should be paying and whether or not i should be getting taxed, and/if whether or not i can claim back tax?? Im unsure about the rules as i am a student!?!?!?!

CIS

Studenst pay TAx and NI like everyone else, depending on income.

NI is paid by everyone on earnings over £94 per week (05/06) at a rate of 11% (if your not contracted out)

Tax rate for 06/07 is £5035, so you wont pay any tax.

So, on £50, you woulnd't pay tax or NI, but you can pay voluntary Class 3 NI of £7.15 p/w to preserve your state pension entilement

robhammond

Hi,

At your rate of earnings you should not be paying any tax. At a crude guess you're earning approx £2600 per year - if you work every single week.

Everyone has a tax-free personal allowance. This means during the 2006/07 tax year you can earn up to £5,035 before your income is taxed.

Any earnings above this amount are then taxed at 10% up to £2,150; 22% between £2,150 to £33,300; and at 40% on earnings over £33,300.

Your student loan or grants are not taxable and therefore do not contribute to your tax-free personal allowance.

You may be being taxed because you have not given your employer your P45 from previous work therefore the Inland Revenue think you have two jobs & therefore will automatically tax you at basic rate on eveything you earn.

As you are being taxed you need to request a P46 form from your employer or local Inland Revenue office. You need to make the declaration that is most applicable to you usually it is the "This is my only or main job" option.

This should resolve the problem.

After that you are entitled to claim back what you have been taxed in the previous financial year by going to the Inland Revenue & speaking to an advisor. It may take sometime for the cheque to come through as it is a busy part of the year for them.

I hope this helps,

Rob

Crispy_Ambulance

Everyone earning over the lower earnings limit pays tax and national insurance. There are no exemptions for students. The Inland Revenue will assume you are earning the same amount of money every week and will tax you accordingly. If you have paid too much tax, you can claim it back, either when you finish your job or at the end of a tax year.

If you have any specific questions, give Tax Aid a call, they are very helpful
Monday to Thursday, 10 - 12, 020 78034959

SanTheMan

Thanks for your help guys