Employing students?
HMRC has written this new guide for employers:
If you are planning to employ students over the holidays, you may be able to pay them gross. If students work for you during the holidays and they do not do any other paid work in term time, they do not have to pay tax if their annual earnings are less than this year’s personal allowance of £6,475.
Before you pay any student, they will have to sign a P38(S) form confirming that they are students and that they are only working during the holidays.
You can download the form from HM Revenue & Customs’ (HMRC) website, www.hmrc.gov.uk/forms/p38s.pdf.
If a student does not fill in a P38(S), you will have to operate PAYE in the usual way. If they pay any tax, they can claim it back by filling in a P50 form and sending it to HMRC in
Part-time jobs in term time
If a student works for you during term time, a P38(S) is not appropriate and you should operate PAYE in the usual way. If they earn less than £6,475 in the current tax year and you have deducted tax from them, they can claim the tax back later. They will need to fill in a P50 form and send it to HMRC in
More information
For more information on students and tax, see www.hmrc.gov.uk/paye/employees/start-leave and select “New employee – special situations”.
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