HMRC: Students should remember their tax-free allowances

Date: 21st July 2011

Students looking to earn some extra cash during the summer break have been reminded of the tax free earnings they are entitled to.

HM Revenue & Customs (HMRC) has reminded students that they will only have to pay tax on their earnings if they work enough hours to earn over the threshold.

Under current regulations, students will only pay tax on earnings above the personal allowance of £7,475.

Filling in a P38(S) form will ensure employers do not deduct tax from students wages and for those that may already have been taxed, HMRC advised they download a P50 form in order to reclaim the money.

Stephen Banyard, director general of personal tax at HMRC, said: "We don't want students to pay tax when they don't owe any, so we're encouraging them to fill in a P38(S) and send it back to us.

"That way they can keep all the money they're earning for student life's essentials."

Posted by Emily Smith