Students and tax

Students that work may need to pay Income Tax and National Insurance. Employers are required to calculate the amount of tax they need to pay on the basis that the students would be working for the rest of the tax year.

This means that an overpayment of Income Tax can occur when a student or temporary worker earns more than their monthly tax-free allowance of £1,042, but over the course of the tax year earn less than their annual allowance. For example, a student only working over the summer period and earning more than £1,042 a month is unlikely to have exceeded the current £12,570 tax free personal allowance.

Students (and other temporary workers) are not required to pay Income Tax if their earnings are below the tax-free personal allowance, currently £12,570.

A refund of overpaid tax can be requested using an online version of the P50 form entitled Claim for repayment of tax. The P50 form can only be used if you are not going to work for at least the next 4 weeks and are not claiming certain state benefits.

Any students that are continuing to work for the rest of the tax year in part-time jobs should consider waiting until the end of the tax year to make a claim.

Source:HM Revenue & Customs| 10-04-2023

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