Student Summer Jobs and Tax, all you need to know.

Student Summer Jobs and Tax, all you need to know.

*Please note the information in this article may be out of date

Tax Code and Tax Free Allowance

If you have taken on a summer job and have not worked any other job since the 6th April 2018 (the beginning of the current tax year), you can earn up to your full annual allowance without paying tax.

For 2018/19 your annual Tax Free Allowance is £11,850.  Tax Code 1185L is what you should see on your pay slip.

PAYE Tax is usually charged once you earn over £958 per month, on average. Though if you are only earning for a couple of months, you will not exceed your personal allowance, and should be entitled to claim any tax you paid, back from HMRC. National Insurance is charged once you earn over £157 a week.

When you have more than one job?

In cases where you have more than one job at a time, HMRC allocate your full personal allowance to your first job and tell your employer to deduct basic rate tax (20%) from your second job, by applying a BR (basic rate) tax code. Issues arise with this system when you may only have worked one job for a short amount of time, and have not used up the tax free allowance that had been allocated to that job, yet are paying tax in your other job. In this case you would be owed a tax refund.

Keep your Pay Slips and P45's

This is basic advice, but so important. Keep all your payslips and your P45 when you finish your job. You can use these to estimate how much you were paid from your employment, and if you are owed a tax refund.

You do not have to wait until the end of the financial year to claim a refund either. For more details on how to claim.

Wear a uniform?

Another tax saving tip for you if you do! A uniform in this case includes a branded T-shirt, or a more specific uniform. You can claim a portion of costs back if you have to purchase, clean, repair or replace the uniform yourself.

The standard flat rate expense allowance for uniform maintenance is £60 (for 2018/19) – so basic-rate taxpayers can claim £12 back (20% of £60), and higher-rate payers £24 (40% of £60). The £60 is a flat rate, so you don't need to record and report the individual amounts you spend.

If your job requires a specialist uniform, and this includes building labourers who need protective clothing, the maximum allowance is £185. A higher-rate taxpayer would get back £74 tax on that for each year they claim (basic rate £37). HMRC have a detailed list of these occupations.  To claim in these cases you would need to claim online through form P87