becoming a mature student

gavhen

i'm currently working full time but will be becoming a full time student in september. i plan to stop working at the end of june and will have been paid approx £5000 gross for the finnancial year, which is just over the new personal allowance.

does that mean that i would not be exempt from any tax on my earnings and savings for the whole finnancial year?

and therefore is it worth my while not doing quite so much overtime before july so that i fall just below the annual allowance, and therefore can be exempt for the year. from my reckoning i could gain about £800 just from my 3 months income tax but is that correct?

gavhen

actually i realised whilst i was at work that i had made one fatal error in my calculations. for some reason i was thinking that all my salary would be taxed whereas in fact it would only be the amount over the allowance d'oh :rolleyes:

so therefore its worth me earning whatever i can over the allowance and i'll just have to lose out on a tax free interest paid on some of my savings for the year. most of my savings will be in an ISA anyway.

another question now though, if i was working in the semester holidays would i still be entitled to the tax free earnings as i was now a student or would the fact i had earned over a certain amount earlier in the finnancial year override that?

gingercordial

gavhen wrote:

another question now though, if i was working in the semester holidays would i still be entitled to the tax free earnings as i was now a student or would the fact i had earned over a certain amount earlier in the finnancial year override that?

There's no entitlement to tax free earnings as a student, it's just that most students don't earn much during the year and therefore don't exceed their personal allowance, so don't pay tax. Those that do earn over their personal allowance are taxed just like anyone else.

You will have to look at your income for the whole tax year, regardless of your student status, to work out if you've earned enough to be taxed.

gavhen

glad you clarified that for me. i had read something about students not paying tax because they only worked in their holidays rather than all year round. i had just assumed it was due to an exemption or something rather than just based on the personal allowance.

lipidicman

A lot of people think students don't pay tax. I think that creates part of the resentment towards students! The only reason they dont pay tax is that hardly any of them have time or well paid part time jobs to earn enough to pay tax. The only good thing is that grants to do things like PhDs (up to £11k a year sometimes now) are tax free, but you do have to work hard for these and graduates can easily earn more than £11k net anyway

BFG_2

When I was at school we had Christmas, Eassterr and summer holidays - where did SEMESTER holidays come from??


(USA, I'm sure the SA's will reply).

Yours

The Langauge Police

lipidicman

Most universities have been working on a semester timetable for years. Though we still have christmas, easter and summer holidays!