Income Tax

Working part time is a necessary evil for most students and with working comes the need to understand the tax system

Your wage slip will state your tax code and this should reflect your personal allowance. Your personal allowance is the amount of income you are able to earn before paying income tax. This allowance is normally divided and spread over a year.

As many students work part-time, or just in vacation periods, they may not earn enough to pay tax - however, the tax may have been deducted automatically based on an assumption of their wages over the whole year, or a tax code error. To avoid paying unnecessary tax and having the hassle of a refund, form P38(S) should be obtained from the employer or on-line if you intend only to work during the vacation. If working two jobs, use form P46 to notify your second employer of your first employer so that your tax code for the second job can be adjusted accordingly.

If too much tax has been paid, a refund can be applied for, either at the end of the tax year (using form R40) or during the year – check with the calculator on Facebook or the HM Revenue & Customs website. If no longer in work, this can be applied for on form P50.

Keep all tax documents: The P45 is issued by an employer after you leave their employment. You will need to retain part of this document and pass the rest on to your next employer.

A P60 is issued each tax year in April/May as long as you continue to be employed as of 5th April (otherwise just the P45 is issued).