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students and tax... just to clarify
Former Member
Posts: 1,876,323 The Mix Honorary Guru
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 !
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 !
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Comments
as far as i'm aware it's after you earn so much.
http://www.hmrc.gov.uk/faqs/general.htm#2
explains about tax allowance for students
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.
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!
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.