students and tax... just to clarify

[vicky_d]

hi everyone !

just wanted to clear something up... im a student and i usually get myself a job every summer for which i do not normally have to pay tax... this year however i worked over a longer period in the summer, stopped for a while and then continued again part time once i was back at uni... when i started back part time i was paying tax but i think this may be because i exceeded my personal allowance (which is around 4000 no?) and im now well into 6000... but i was under the impression students pay zero tax regardless of how much u get, can anyone clear this up for me ? :chin:

many thanks !

[lucifer devil]

no, otherwise surely people would do a part time degree with a full time job and not pay tax!

as far as i'm aware it's after you earn so much.

[vicky_d]

lol wouldnt that be nice :naughty: tax sucks ! thanks for your help tho

[katralla]

If you study part time- you're not counted as a student for tax purposes! surely full-time student are completely exempt from income tax? If their personal allowance is the same as anyone else's, what's the point in students being able to work tax free- they wouldn't be. Ask your tax office.

[*Snow White Queen*]

You are only exempt from tax in the summer if you don't work throughout the rest of the year.

[katralla]

well, it seems I'm wrong

http://www.hmrc.gov.uk/faqs/general.htm#2

explains about tax allowance for students

[Knee High Stripy Socks]

On a slight tangent, any idea where I would find out about claiming tax back for the last year, now I am at uni?

[*Snow White Queen*]

Here you go dear...http://www.hmrc.gov.uk/payetaxpayers/iwtclaim-a-tax-repayment.shtml

[Knee High Stripy Socks]

Thank you sweetie

[Randomgirl]

You have to pay tax on anything you earn that is over the normal tax-free limit (£4000-and-something).

You may find that you have to pay tax and then claim it back or you may be able to do a form which means you don't have to pay the tax in the first place.

[girl with sharp teeth]

Students are no more exempt from paying tax than anybody else is. Most students don't pay any tax simply because they don't earn enough to go over their personal tax threshold.

[Mac Sami]

The income tax allowance for 2005/06 is £4895.

The bugger is that if you're paid a wage over a short time i.e. a summer job, chances are you'll be hit with stamp contributions (sorry, national insurance), as that's calculated on a weekly basis.

In such a situation, a useful tip, where possible, is to be self employed. For example, I simply invoice my job for my IT work i.e. as if they are a client who have contracted me (as I have previously done similar IT work for different clients), and then self assess for tax. Should I then have to pay NI, it'll be a lower amount (or so I'm told, as it'll be a different class).

That probably doesn't help, or is a load of crap, or even both!

[katralla]

When you become self employed- you must register as such with the IR within a short time period or face a fine. When registered you pay your own NI, usually quarterly by Direct Debit. There are two rates of NI for self-employed, the lower one is £2.10 a week I think- but don't quote me on it. So Mac: you should be paying your NI as you go, not at the end of the year...

[Mac Sami]

When you become self employed- you must register as such with the IR within a short time period or face a fine. When registered you pay your own NI, usually quarterly by Direct Debit. There are two rates of NI for self-employed, the lower one is £2.10 a week I think- but don't quote me on it. So Mac: you should be paying your NI as you go, not at the end of the year...

No; if you complete a CF10 (ex. CF02) form, you are essentially declaring that your earnings (that's money less expenses) will not exceed the current Class 2 small earnings exception (£4,345). So if in a year you do not earn that much, you do not have to pay NI (although you may still voluntary contribute).

If you earn more than £4,345, you are liable to pay the base rate of £2.10 a week.

If you earn more than the income tax allowance, you are then charged on a sliding scale on top of the £2.10

The point I was trying to make was that with Class 1, you pay a percentage of your earnings over £94 a week as NI i.e. it's weekly, whereas with Class 2, it's based on your tax year's earnings.

[lucifer devil]

i hate thinking i've earnt over the amount. where has it all gone? :(

[katralla]

Aha. Thanks Mac- you learn something new every day!