Student tax fact sheet
Did you know that students are required to pay tax in exactly the same way as other UK employees not in education? If not, you’re not alone: when quizzed, 67% of students didn’t know this either.
Top tax tips
- Tax and National Insurance is deducted from students’ earnings in the same way as with other workers. However, everybody can earn a certain amount tax-free each tax year - the Personal Allowance - which is currently £6,475.
- If students earn less than the Personal Allowance and have paid some tax, they can claim a refund. Use the tax refund calculator to help work this out: http://apps.facebook.com/uktaxrefundcalc/
- Students should receive a P45 form on leaving a job which should be given to their next employer. If working on 5 April, they will be given a P60 which summarises earnings and tax and National Insurance deductions.
- Students are only entitled to one Personal Allowance in any tax year (April to April), even if they have more than one job.
- The P38(s) is the form for students who only work during the holidays and expect to earn less than the Personal Allowance. Students should ask their employer if they think this applies to them.
- Tax codes are found on payslips, P45s or P60s. Most students will either see a 3 digit number followed by a letter (e.g. 647L) or just the two letters, BR (Basic Rate). 647L means that your full Personal Allowance of £6,475 is taken into account when you are paid.
- Employers deduct National Insurance contributions from students’ earnings whenever they earn more than £110 per week. Unless an employer has incorrectly deducted National Insurance contributions, students cannot obtain a refund.
- Students should tell their employer their NINO, received at the age of 16, when starting work and quote it when contacting HMRC. Using it correctly will make sure that National Insurance contributions are recorded against the student’s name and will help to prevent identity theft.
- Foreign students should apply for a NINO by calling the Jobcentre Plus NINO allocation service helpline on 0845 600 0643.
- Students with their own businesses need to register with HMRC within 3 months. Tax is payable on profit made in excess of the Personal Allowance - a Self Assessment tax return will enable you to calculate this.
- Students should make sure they notify HMRC if they change their address.
What could you do with £100…?
No more beans on toast for the 16% of students who have received refunds of more than £500! And with the average refund sum of £100 , you could:
- Go to the cinema every week for 28 months
- Get return flights to Prague with plenty of cash left over for spending money
- Treat nine of your friends to see Avenue Q in the West End
- Buy a digital camera
If your children have worked whilst at uni, make sure they check whether they are entitled to a refund.
When you’re a student, every little helps!
“Since starting my degree, I’ve spent every lunchtime working in a deli to get some extra cash. I was delighted when I realised that because I’d earned under the Personal Allowance last year, I was entitled to a refund – the money has certainly come in handy this summer!”
Rachel Shaw, First Year Geography Student.
“I’ll be spending this summer working in promotions. I don’t expect to earn more than £6,035 so I’ll certainly be using the tax refund calculator to see if I’m due a refund – when you’re a student, every little helps!”
Viv Bowdler, Second Year Graphic Design Student.
For more information about HMRC’s student tax campaign, please contact HMRC press office on 020 7147 0051
1According to research by ICM carried out on behalf of HM Revenue & Customs, February 2008
2Refund statistics taken from research by ICM carried out on behalf of HM Revenue & Customs, February 2008
3Based on student ticket at Odeon costing £3.50
4EasyJet offer flights from London Stansted to Prague from £27.00
5Weekday tickets to Avenue Q start at £10