Can employer refuse to take P38?

maple41

My student daughter has manged to get a full time job for the summer and submitted a completed P38 so that she wouldn't have to pay income tax. Big national company has told her they don't accept P38s. Has been to see the payroll dept who have told her that they have "opted out" of accepting P38s. Can they do this? Now she has to pay tax and claim it back.
She has never had a probably with Sainsburys or Reeds accepting P38 when working in the holdays before. Have tried HMRC website but doesn't answer the question, seems to imply that employers should accept P38 from students only working in the holidays. No mention of employer being able to "opt out".

fengirl_2

The P38 system is not mandatory. I can understand that a very large company would feel unable to accept a P38 as their payroll system would probably not be able to ensure that she didnt go over her limit.
If she signes a P46 to say this is her first job this year, then she will have at least £2158 tax free so far this year, so, unless she is earning megabucks, she should not pay tax anyway.

glider3560

At the end of her employment (i.e. end of holiday), she can fill in a P50 and sent it with her P45 to the tax office. My refund came through within 3 weeks last year.
http://www.hmrc.gov.uk/pdfs/p50.pdf

greatidea

A lot of large payroll companies and bureaux prefer not to accept P38's as its difficult to ensure that the employee is only working in term time.

However all the P38 does in theory is give the full years tax allowance up front ie 6479 per year, as long as your daughter is on a 647L cumulative tax code and not week 1 / month 1 then any tax she has paid will be refunded but the 6479 will be pro rata each month as the previous post suggests.

Kind regards

Allan Pearson
PAYEpeople

Any

As Fengirl says - As long as she is on 647L cumulative she will not pay any tax what so ever.
As it is August already she has already acrued 5 months of the allowance so unless she is planning to earn 2700-3000 (if working Aug-Sept) in this employment she is not going to reach the tax level.

chrisbur

110 Students who are on courses in the UK

You can use a special procedure for employees who
are students on courses in the UK working for you
solely during their holidays. The special procedure,

known as the P38(S) procedure:

Above from

Employer Further

Guide to PAYE and NICs
at
http://www.hmrc.gov.uk/guidance/cwg2.pdf

I have underlined the first part that gives the employer a choice whether to use the P38(S) system or not.

As others have said; if P38(S) is not being accepted then signing a P46 will usually have the same affect for a holiday job.

maple41

Thanks everyone.
I and her were expecting that she would have to wait to the tax year end (april '10) to apply for her tax refund, as a friend of hers did, this last tax year.

glider3560

maple41 wrote: »

Thanks everyone.
I and her were expecting that she would have to wait to the tax year end (april '10) to apply for her tax refund, as a friend of hers did, this last tax year.

There seems to be a myth among students that tax can only be reclaimed at the end of a tax year, which is completely untrue. You can reclaim tax as soon as you stop working.