Taxman targets student workers

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Students looking to earn extra cash in the summer will no longer be able to ask not to have income tax taken from their wages, reports Harris & Co Chartered Accountants Northampton.

 

Previously, students doing occasional work where able to fill out a P38(S) Form, which prevented 20% income tax being deducted automatically from their pay.

 

Most students earn less than the annual tax free personal allowance of £9440.

 

Since April 2011, almost 4,000 forms have been issued by employers according to figures from HM Revenue and Customs. However HM Revenue and Customs quietly scrapped the form in April and students will be paid under PAYE. This means that anyone earning more than one 12th of the annual allowance each month, or £786, will pay tax.

 

Students can claim back the tax if they think that their total income will be less than the annual personal allowance. Students should make sure they get a P45 when they finish their job. This will show their PAYE code, total earnings and the tax paid. If they do not intend to work for the rest of the tax year, and had stopped working for at least four weeks, they can claim back a refund by filling in a P50, available from HMRC"s website.

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