Poor Students ?
As thousands of students take on summer jobs some will find themselves affected cash flow wise.
Until now students have been able to sign an HMRC declaration P38(S) requiring employers not to deduct tax. The P38(S) has been withdrawn under the new Real Time Information Regime.
This means that any student earning more than £786 per month will suffer tax at source. This is not to say that they cannot claim any overpaid tax if their total earnings are less than £9,440 in the tax year but many who continue to work part time during their studies will have to wait until April next year to receive their rebate.
Those who discontinue working will be able to make a claim using form P50 four weeks after finishing work.
There have been rumblings in the past that P38(S) has been inconsistently and incorrectly used, so this move will put paid to any concerns.
Of course some may now consider it an enforced savings scheme for students but I suspect that many will neglect to make a claim giving HMRC a small windfall perhaps? Perhaps they need it following recent press coverage on the tax gap.