HMRC’s Christmas gift for students
Just before Christmas HMRC issued a reminder that ‘Student festive helpers’ need not pay tax on their casual earnings over the festive period. HMRC suggest that such workers "could get tax free income gift".
Whilst this reminder contained nothing new it serves as a useful reminder to students (and other temporary workers) that they may not be required to pay any income tax on earnings that are below the tax free personal allowance for the year.
Students who expect to earn less than £6,475 in the current tax year (i.e. to 5 April 2011) and complete a form P38(S) when they commence temporary employment should be able to receive their pay tax free.
Students who already have earnings in the current tax (within the personal allowances thresholds) which have been taxed could be eligible for a refund. A refund of overpaid tax can be requested from HMRC using a form P50.
HMRC’s news release specifically mentions students who work as ‘santa’s helpers’ may not need to pay tax on income earned over the festive period. If they did they should now be able to claim it back!