Students who work part-time can no longer avoid the deduction of income tax from their wages. The P38(S) form has been dropped. This form allowed students to ask their employers to not take the automatic 20% income tax off their wages at the end of the month.
Students will notice that even though they are earning less than the tax threshold of £9440, tax has still been deducted as of April 2013. Anyone earning more than £786 (which is more than one twelfth of the annual allowance) will now pay tax.
However, there is some good news. Students can claim back any overpaid tax, should they feel that their total income will be less than the annual personal allowance.
If you’re a student, make sure not to lose the P45 given to you by your employers at the end of your part-time job. This shows your PAYE code, your total earnings and the tax paid. It’s very important to keep a close eye on this to ensure that the right amount of tax is being deducted.
For assistance relating to your income tax as a student, please visit www.1stcontact-taxrefunds.com and our consultants will gladly help you.