Is it true that full time students dont have to pay income tax on earnings?

Answer 1

Students pay no tax only if they are employed during normal college/university holidays. At any other time they are subject to the same PAYE rules as the rest of us. The reasoning behind the holiday times rule is that the student has the same personal allowance as everyone else and, normally, this will exceed the amount that can be earned. So by not having tax deducted it saves a lot of time and paperwork.

It is not given automatically though and application must be submitted on form P38(S).

Answer 2

No that is not true. Regardless of whether you are a student or not, you pay tax based on the amount you earn. In the UK, you can earn up to £5035 per year (this is called your personal allowance) before you have to start paying tax. Anything over this should be taxed at the relevant rate.

I think the myth of tax free students comes from the fact that most students work part time so earn under this amount in a year. Another contribution to this misunderstanding may be that most students get tax back on summer jobs, especially if they don't work during term time because they are still not breaching that threshold over the full year.

Be careful about jobs that pay you in cash or don't tax you when you think you should have been taxed - the HMRC can demand tax to be paid up to 6 years after you had the job - not a nice bill to be landed with!

Good luck

Answer 3

Everyone in the UK gets a "personal allowance". this is an amount of income you can receive every year tax free. for the 06/07 tax year, i.e. 6 April 2006 to 5 April 2007, this amount is £5,035.00 (and it's £5225.00 for the 07/08 tax year. So provided you earn less than that you're earnings would be free of income tax. however, you would still have to pay National Insurance contributions, of i think 11%.
If your earnings are above this, you would pay 10% on the first £2,130.00, 22% until you hit around £30,000.
hope this helps.

Answer 4

Students and Tax
Do Students pay tax? Do Students pay National Insurance?
How to deal with students working for you raises a lot of questions. In answer to the above, YES and YES. All income is subject to tax and national insurance. Confusion arises out of which tax form a student should complete—P38(S) or P46. The answer again is quite simple. If the student is working during term time ie at weekends and evenings, then they must complete a P46. If the student is working during Summer/Christmas/Easter vacations ONLY then they may complete a P38(S). Hope this clears that one up for you.

Answer 5

That depends on how much you are earning, currently the normal tax code in the UK is 503L (rising to 522L in April) this means you can earn £5035 per annum without paying tax. You divide this by 52 if paid weekly = £96.83 or 12 if paid monthly = £419.58 this is the amount of tax free pay you can be paid in any period. If you are earning above these amount you will pay tax at 22% on the earnings above this.

However if you are in full time education and ONLY work during college / uni holidays you can complete a P38s student declaration form, your tax code would then be NT meaning Nil Tax. But if you start to earn over the £5035 your tax code would need to be amended to reflect this and you would therefore start paying tax.

Answer 6

No - students are subjected to the same taxes as the rest of us. The tax threshold (level of income earned before tax is due) is usually sufficiently high to allow many students to work part-time without paying tax. However, once that threshold is reached then tax is payable. I think the current threshold is around £5,000 per annum.

They also pay VAT on all their booze, fags and clothes so despite what many people think they DO actually contribute something to society!!

Good luck!

Answer 7

That would be false. Students still have to pay income tax if their earnings are over 400 dollars.

Answer 8

in the uk, there is a certain amount you can earn before you start to get taxed, its around 2000 or maybe 3000, im not sure of that, but after youve earned more than that, your tax will be calculated depending on your earnings... I have aolso found that most of my tax from when i was a working student were returned to me in a handy lump sum, it was like a savings fund i never knew i had!!!!

Answer 9

No, that is not true. Two of my kids are in college full time and work part time as well. They are taxed on their income.

Answer 10

Well I am a full time student and I work part time, I dont have to pay any income tax at all YIPEE!

I am UK btw