Students offered tax education

Date: 4th September 2009

University students have demonstrated a lack of basic knowledge about the UK taxation system.

Around half of all undergraduates and postgraduates are thought by HM Revenue & Customs (HMRC) to not know that they pay income tax, whatever they earn.

Current tax rules state that students pay the tax and then get it refunded if they earn less than £6,475 per year.

Knowing about reclaiming the levy could affect students' tax planning during their studies.

In a bid to tackle the problem, HMRC said that it had launched applications such as the student tax calculator available on its website, along with advice on matters such as what to do with P45 and P60 forms and explanations about tax codes and National Insurance contributions.

Moreover, a Facebook application including the tax calculator is also to be unveiled at a future date.

Jane Frost, director of HMRC Individuals Customer Directorate, commented: "Making sure your tax code is right from the start of your paid employment can save you money and is good training for life after graduation.

"We want to help students understand how the tax system works ideally so they pay the right amount of tax from the outset and can claim what is due."