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    Could someone help me with a problem? Well, I am soon gonna work at an office during the summer. I have just finished my first year at university (Sheffield) and will be continuaing to my second and third years. I have received a letter today from the Inland Revenue giving me a tax code of 461 or something like that. Basically, I know it is the wrong tax code. My question is should I bother writing to the tax office to get the correct tax code? I think its only worth it if I dont get to pay national insurance. So do students on the student tax code pay national insurnace? also, if I earn a lot of money would this affect the amount of loan I receive next year? also, are students even allowed to earn money whilst having a student loan. I dont wanna to lose my student loan so if someone could confirm this thatll be great. thanks!
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    Of course you won't lose your student loan!

    Basically, the Inland Revenue will never, ever get your tax code right. If they don't have conclusive proof handed to them on a plate of exactly where you have worked and how much you have earnt since the beginning of the tax year, they'll put you on emergency tax and you'll have to get it changed.

    I was unemployed between April and July last year whilst doing my A-levels and I handed in my P45 to show I only earnt a few hundred quid between April and September when I started my new job, and yet they still cocked up and deducedt tax at the basic rate. Probably the easiest thing to do is to wait until you go back to uni and have got a P45 from this job, then contact your tax office and explain the situation. You'll have a few forms to fill in, and you'll have to complete a declaration of any time in which you were not earning, but then you should get a rebate.

    DON'T LOSE YOUR P45!

    It won't affect your loan though. Not unless you're planning on earning £20-30k this summer anyway.
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    Students pay NI.

    They also have to pay tax on non-vacation jobs. Not doing so can land you with a hefty tax bill at the end of the year, as someone on my course found out!
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    (Original post by susiemakemeblue)
    It won't affect your loan though. Not unless you're planning on earning £20-30k this summer anyway.
    Even then it doesn't.
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    If you got more than the minimum loan because your family was on a low income, then surely it would?

    Not that any student could earn that much anyway, but in theory...
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    (Original post by susiemakemeblue)
    If you got more than the minimum loan because your family was on a low income, then surely it would?

    Not that any student could earn that much anyway, but in theory...
    Nope - a students earnings are not considered -thankfully. I'm back in my pre-uni job [I'm a mature student and already have one BSc and doctorate, so my earnings are quite high] and would be fecked if they included your vacation earnings in my loan calculation!
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    You will still get taxed if you are a student and exceed the maximum untaxed earnings threshold (currently £4895). Once you go over that in a year (April to April) you will get charged 10% tax for the next £2020 then 22% tax for earnings upto £36295.

    If you are a student working only in the summer, and not expecting to earn more than your untaxed allowance (i.e. your annual income will not exceed £4895), then you are allowed to fill in a P38S form which will allow your employer to pay you without first deducting income tax. A copy of the form can be found here with the notes which corroborates what I've said above:

    http://www.hmrc.gov.uk/forms/p38s.pdf

    Additionally, if you earn over a certain amount (think it's £82/week but not quite sure how NI works) then you will still be charged National Insurance on what you are paid.
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    Thanks for alll your terrific advize! If, as Kingspharm says, students also have to pay National insurance then I dont think ill bother trying to get the P38S form as even though I think ill only earn a max of £2000 and will be taxed I can get a tax rebate next year for any of the £2000 or so taxed. I was only thinking whether students dont pay national insurance as national insuaance is never refunded (at least thats wot my dad says). my little sister is 17 but she doesnt pay national insurnace. is it that everyone, inclduding students, above the age of 18 pays national insuarance?
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    The p38 is about income tax, not NI. If you don't fill one in they'll start deducting PAYE tax...
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    So everyone over 18, including students, pays national insurance?
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    (Original post by Crazy Frog Die)
    So everyone over 18, including students, pays national insurance?
    Over 16, i think, if you're working.

    But you only start paying income tax if you earn over c. £4000 a year. And these things are best sorted out as soon as possible because the inland revenue aren't that keen on giving money away at the best of times!

    Beginners' Guide to Tax here you go!
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    Yep, you might as well fill in a P38S if you are only working over the summer, as it means you get all your money then and don't have to wait till next April to claim back the tax you shouldn't have paid.

    Anything that you earn over £4895 in a year will be liable to income taxation though.
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    (Original post by Crazy Frog Die)
    So everyone over 18, including students, pays national insurance?
    No, *everyone* regardless of age pays Tax and/or NI if they earn enough. Age has nothing to do with it.
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    (Original post by grumballcake)
    No, *everyone* regardless of age pays Tax and/or NI if they earn enough. Age has nothing to do with it.
    well, over 16!
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    (Original post by allisandro)
    well, over 16!
    No, not over 16. Charlotte Church was paying 40% tax at age 13/14. If you earn enough money from any sort of job, you pay tax and NI on it. If you earn enough interest on a bank account, you pay tax on it (but not NI, because it's deemed to be 'unearned' income). Generally the restrictions on working for under 13s means that they won't generally pay NI.

    In some cases, a child's income may be deemed to be added to the parents' income, but it still attracts tax.

    I am an employer BTW and fill out all the tax returns both corporate and personal every year.
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    (Original post by grumballcake)
    No, not over 16. Charlotte Church was paying 40% tax at age 13/14. If you earn enough money from any sort of job, you pay tax and NI on it. If you earn enough interest on a bank account, you pay tax on it (but not NI, because it's deemed to be 'unearned' income). Generally the restrictions on working for under 13s means that they won't generally pay NI.

    In some cases, a child's income may be deemed to be added to the parents' income, but it still attracts tax.

    I am an employer BTW and fill out all the tax returns both corporate and personal every year.
    But you don't get a national insurance number until you're 16, and i read on that site i posted the link to above that you have to be 16 to apply for one.

    EDIT: the inland revenue site also states you pay national insurance when you are over 16.
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    Hang on, there are two separate issues here: tax and NI.

    I was too hasty on NI. You're correct in that you don't start to pay NI until you're 16, according to the Revenue guidelines, although I haven't been to look at the relevant Finance Acts or ICTA.

    You are incorrect in that you do pay tax at any age.
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    (Original post by grumballcake)
    Hang on, there are two separate issues here: tax and NI.

    You're correct in that you don't start to pay NI until you're 16, according to the Revenue guidelines, although I haven't been to look at the relevant Finance Acts or ICTA.

    You are incorrect in that you do pay tax at any age.
    Oh yes sorry - i was only referring to national insurance, i should have been more explicit.

    (Original post by grumballcake)
    If you earn enough money from any sort of job, you pay tax and NI on it. If you earn enough interest on a bank account, you pay tax on it (but not NI, because it's deemed to be 'unearned' income). Generally the restrictions on working for under 13s means that they won't generally pay NI.
    This does infer that under 16s would pay NI if they earned enough, which isn't the case.

    But i was never debating that you pay tax at any age, my fault for not detailing that, sorry for ambiguity!
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    (Original post by allisandro)
    This does infer that under 16s would pay NI if they earned enough, which isn't the case.
    Yes, I was careless in that posting, my apologies.
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    As someone said earlier - the Inland Revenue hardly get people's tax codes correct- everyone normally starts on 489L cumulative, at the basic rate, and they then sort it out afterwards at the end of the financial year.
    So generally you'll always get your tax code sorted in the end, with money deduced for income tax returned to you.

    And I can confirm that income tax is paid regardless of age as long as anyone has earnings over a certain limit. National Insurance however, is only paid once someone turns 16. I've got a summer job at DWP btw

    Also, a student need not declare holiday jobs as earnings when applying for a student loan - only those on a part time degree who have a job throughout the year will have their salary taken into account for the academic year.
 
 
 

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