Blick Rothenberg

No vacation from tax and National Insurance for students doing holiday work

23.07.2018

Thousands of UK businesses that employ students on summer holiday jobs are unclear of their obligations.

Yadvinder Rihal, employment taxes manager said: “When a student is employed over the holiday period, who is in fulltime education there are no special procedures. Employers must treat them in exactly the same way as any other employee, including their eligibility for pensions auto enrolment.”

He added: “Whilst previously HMRC had a procedure where by a student would complete a declaration advising the employer and HMRC  that they were in full time education and they would not be exceeding the personal allowance over the tax year. Employers would then not be required to deduct tax. However with the introduction of Real Time Information ("RTI") this was abolished.”

Yadvinder advised the students saying, “If you have a job when you’re a student you have to pay Income Tax if you earn more than £987 a month on average - this is your Personal Allowance and National Insurance if you earn more than £162 a week.”

“Your employer will deduct Income Tax and National Insurance from your wages through Pay As You Earn ("PAYE").”

He added: “If you’ve paid tax and stopped working part way through the tax year you may be able to claim a refund by contacting HMRC. HMRC may require you to set up a personal tax account in order to process the refund. This can be done online.”

For more information, please contact Yadvinder at yadvinder.rihal@blickrothenberg.com