Income Tax

Whether you work during term-time or just in the holidays you’ll normally have tax and National Insurance deducted from your earnings.

The tax year

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

Personal allowance

The standard personal allowance for the 2017/18 tax year (ending 5 April 2018) is £11,500.

This means that over the whole tax year you can earn £11,500 tax-free. All income over this amount is taxable.

This doesn't mean that you can earn £11,500 before you start paying tax. The allowance is spread across the year, so you start paying tax when you start earning even if you’re due to earn under £11,500.

Tax Refund

Students are taxed on their wages from employment in the same way as anyone else. Many students pay too much tax under PAYE and later have to claim a refund:

  • if you earn less than your personal allowance but have paid tax, you can claim a refund. Use the HM Revenue and Customs tax calculator to see whether you’re entitled to a refund.
  • before the end of the tax year you should be able to claim an in-year tax repayment using form P50.
  • at the end of the tax year you’ll need to write to HMRC. Mark the top of your letter clearly ‘repayment claim’ so HMRC prioritise it.
  • you have four years from the end of the tax year to claim a refund. If a claim is not made within the time limit you’ll lose out on your refund.

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 need to complete a R105 form.

For further information you can call HMRC Taxes helpline on 0845 070 3703 or visit: