Every little helps: a tip for students claiming tax back

/ 12 September 2018

Geraint Jones

David Whiscombe shares a tip for students.

No: this is not a reference to our London office’s proximity to one of Tesco’s splendid emporia.  It’s about a modest cashflow benefit for students.

Until a few years ago there was a special PAYE scheme for students undertaking holiday work.  If a form P38(S) was signed, tax wasn’t deducted unless and until aggregate pay exceeded the annual personal allowance (which in most cases it never did, of course).

In 2013 that sensible arrangement was abolished and PAYE was applied to students in the same way as anyone else.  The result is that many students who have been employed over the summer will have had tax deducted from their earnings.

That tax can of course be repaid if the student’s total income for the tax year (including earnings and any investment income) doesn’t exceed the personal allowance (£11,850 for the current year).

What’s perhaps not as well-known as it might be is that you don’t always have to wait until the end of the tax year next April to make a claim to get that tax back.  There is scope for making an earlier claim using form P50 (link here).

Note that if you are expecting to work again before next April (whether term-time work or during the Christmas vacation) you cannot reclaim in this way: you will need to wait until you’ve finished earning for the year.  Also, don’t forget that in figuring your UK tax liability you will need to take into account all earnings—including even earnings from employment abroad.

Sadly, the same rules don’t apply to National Insurance Contributions.  Not only can you not get those back in-year: you can’t get them back at all.

For more information, please get in touch with your usual BKL contact or reply use our enquiry form.

More information on the new book Partnership Taxation 2018/19, written by David Whiscombe, is available here.

Geraint Jones

Partner, Private Client Tax

T +44 (0)20 8922 9354
E geraint.jones@bkl.co.uk

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