R85 form

mdb99jh

Hi I am a student, setting up an easy access savings account. I was told that in order to avoid tax on my interest, I should fill in an R85 form. However, the form only seems to be for people on low income, not students! It doesn't have anywhere for me to say "I am a student and thats why you shouldn't tax me". Is this definitely the right form or do I need something else?

Kazza242

The R85 form is definitely the correct form you need to fill in. Registering for gross interest doesn't quite work in the way that you think. Each new tax year, a personal allowance is issued. The personal allowance determines how much you can earn without having to pay tax on it. For this tax year, 2005/06, the personal allowance for those that are under the age of 65 is £4,895.

As you are a student, it is unlikely that you'll be earning above that each tax year - even if you have a part-time job.

Fill the form in and remember to complete one for each institution that you bank with. You will also need to include on the form, all your account numbers for that institution.

mdb99jh

Oh ok, gotcha. I am a postgraduate student though, and my income is greater than the allowance. Presumably this means that I will get taxed after all...

masonic

If you are doing a phd, then I guess you are funded by a research council grant or similar. This income is tax exempt and can be ignored for the purposes of filling out an R85. Personally, I'm just coming to the end of my phd and I haven't paid a penny of tax on any of my income since starting, and I have funding from both my university and an industry top-up.

ctm_2

mdb99jh wrote:

Oh ok, gotcha. I am a postgraduate student though, and my income is greater than the allowance. Presumably this means that I will get taxed after all...

Being a student has absolutely no bearnig on your tax status at all. Everyone pays tax regardless of being a child, student, pensioner or anything else.

It's just that most students don't earn more than their personal allowance in a year.

If your total taxable income for the year is higher than your personal allowance of £4895, then you will have to pay tax on your interest.

mdb99jh

Yeah I am a Phd student, funded by a research council. So then for the purpose of the R85 I'll just ignore this then?
Nice one. Thanks to all for your help
:beer: