Even with student loans, student grants if you can get them and help from parents and family, many students find themselves short of money at university. Taking a part-time job or working in the holidays is a brilliant way to make yourself more financially independent and get some valuable work experience at the same time.
But before you start applying for jobs, it’s important to get clued up about student tax rules so that you don’t start your working life by upsetting Her Majesty’s Revenue and Customs (the all-important HMRC).
If you are a student at a UK institution and you only work during the long holidays (Christmas, Easter and summer), it’s possible that you won’t have to pay tax, but you do have to make sure you give your employer all the information they need so that HMRC can issue you with a student tax code.
In previous years you may have filled out a P38(S) to get a student tax code, but this no longer applies and you’ll now be treated just like any other employee.
National Insurance Contributions (NICs) are only deducted if you earn more than £146 per week. They are charged at 12% on anything up to £817 per week plus 2% on anything over £817 per week.
If you work during term time the holiday only student tax rules no longer apply, you will be subject to the same rules as every other employee.
The rules for National Insurance Contributions (NICs) if you work throughout the year are the same as for if you only work during the holidays.
There are no special student tax rules if you are self-employed, but you must:
HMRC don’t treat ignorance as an excuse for you not registering for paying your tax and National Insurance so make sure you ask about and complete all the relevant notifications as soon as you start every job so that all your student tax records are fully up to date. Remember to also keep copies for your own records.