Students 'shouldn't have to pay tax'

Date: 4th December 2009

Students planning to take on paid work during the Christmas vacation are likely to not have to pay income tax on their earnings, HM Revenue & Customs (HMRC) has pointed out.

Under the current rules, students who earn less than £6,475 in the current tax year - a group which would include most of those taking on occasional part-time work - do not have to pay income tax.

However, this tax-free status is only gained if the student fills out a P38(S) form when they start their jobs.

Jane Frost, director of HMRC individuals customer directorate, said: "Before starting any vacation job, it's a good idea to make sure you know about tax.

"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 so they don't pay more than they should and also get back what is due."

Students who have paid too much tax already under the rules retain the right to apply for a cash refund.

The application process can be accessed via HMRC's own website or through a specialist Facebook application known as Universilly Challenge.

Posted by Anthony Burns