To earn extra cash, many undergraduates take summer jobs. But large numbers are unaware that, provided their total earnings for the tax year are less than the personal allowance of £7,475, they will not have to pay any tax on the money they make.
To ensure their employers don’t deduct tax they don’t owe, students need to fill in a form P38(S), which they can download from the HMRC website at www.hmrc.gov.uk/forms/p38s.pdf.
Students who fail to fill in the form will not lose out however, as they can reclaim any tax paid by sending HMRC a form P50, available online at www.hmrc.gov.uk/pdfs/p50.pdf.
Stephen Banyard, director general of personal tax at HMRC said: “Many students will choose to work during the summer holidays. We don’t want those 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.”