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Summer working students may be due a tax refund

Students who have worked over the summer need to make sure that they have not overpaid tax and whether they are due a tax refund from HMRC, advises The Low Incomes Tax Reform Group (LITRG), an initiative of the educational charity the Chartered Institute of Taxation (CIOT).

LITRG highlights that students are more likely to overpay tax as they usually only work - or earn more - at certain times of the year. The overpayment of tax arises because their tax-free personal allowance is usually spread evenly across the tax-year but they may earn more in some months than their monthly personal allowance of £987 and so are taxed through PAYE, even though over the whole tax year they earn less than the annual personal allowance of £11,850. National Insurance contributions (NIC) are calculated on a pay-day basis and not cumulatively over the tax year like income tax, so it is unlikely that students will have overpaid NICs unless a mistake has been made.

Claiming a tax refund is can be applied for online using a Personal Tax Account (,CH9W,46ID7C,1DXYJ,1). A refund can only be claimed for during the tax year if students do not plan to work or claim a state benefit within the next four weeks.

Victoria Todd, Head of Team at LITRG, said: “Many students will be coming to the end of the temporary jobs they have held over the summer holidays and although some will continue to work while studying, others will not work again until the Christmas holidays or maybe not until the new tax year. For those students who do not plan to earn a wage in the near future we recommend they investigate whether they have overpaid tax on their summer jobs and put in a request for a tax refund now rather than wait until the end of the tax year for HMRC to perform their annual reconciliation.

”We recommend that students keep all their paperwork, such as payslips, so they can work out and understand their tax position at the end of the tax year. They only have four years from the end of a tax year to request a tax refund so it pays to be organised with their tax affairs. Even if they have claimed a tax refund during the year, they may start a new part-time or temporary job and that may affect their tax position. Often employers will provide payslips and P45 forms online so it is important that they print out all the records they need while they have access to them.”




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