Income Tax

Whether you work during the term-time or just in the holidays you will normally have tax and National Insurance contributions deducted from your earnings, in the same way as other UK employees.

The tax year

Each tax year begins on 6 April and ends the following April. However, everybody can earn a certain amount of money tax-free in each tax year. This is known as your personal allowance.

Personal allowance

The personal allowance for people under 65 for the current tax year (ending 5 April 2013) is £8,105

This means that over the whole tax year you can earn £8,105 tax-free. All income over this amount is taxable.

This doesn't mean that you can earn £8,105 before you start paying tax. The allowance is spread across the year, so you start paying tax when you start earning. If, at the end of the tax year, you have earned less than the Personal Allowance, you can claim a tax repayment.

Earning less than your personal allowance

The P38(S) form is for students who only work during the holidays and expect to earn less than the personal allowance during the tax year. If you think this applies to you, you should ask your employer for the form as it will mean that your employer does not need to deduct tax from your pay.

Please note that some employers don’t offer this option, as it’s a special arrangement that is voluntary for them. However, it is still worth asking your employer for the form.

Tax repayment

If over the tax year you earn less than your personal allowance but have paid tax, you can claim a repayment.

Use the HM Revenue and Customs student tax calculator to see whether you are entitled to a repayment.

If you have paid too much tax tell your employer's tax office why you think you've paid too much tax. They may already have everything they need to check your claim. If not, they'll tell you what documents to send. You may get a new tax code, so any refund will be included with your wages.

Paying tax on interest

If you're on a low income and have savings with a bank or building society you could be paying tax on your interest when you don't need to. If this is the case, you can register to have the interest paid tax-free. You can also claim a refund of any tax you've overpaid. To prevent tax being deducted from your interest you can ask your bank for an R85 form. International students will need to complete a R105 form.

For further information about income tax can be obtained by calling HMRC Taxes helpline: 0845 070 3703 or by visiting: