Income Tax

Do students pay tax?

All students who are resident in the UK will pay Income Tax on their earnings over a certain amount. See the HM Revenue and Customs website for more information on residency and tax liability.  This includes international students who are here for their studies.

The tax year runs from 6th April to 5th April the following year.

How much tax do I pay?

Income tax is paid on any income that you receive over a certain amount during the tax year. The most common forms of taxable income are:

• Earnings from employment
• Profits from business
• Interest from savings
• Rental income

Student loans, Grants, Scholarships, Bursaries and Research Awards are not taxable.

Each individual is allowed an amount of income that is tax-free. This is your personal allowance and you pay tax on any income over that.

The Personal Allowance is as follows for the years:

There are additional allowances, such as the Blind Person’s Allowance and you can find more information here.

When your employer or HM Revenue and Customs calculate your tax, they divide your tax allowance into monthly or weekly allocations which build up throughout the tax year.

PAYE (pay as you earn)

PAYE allows your employer to calculate and deduct tax directly from your wages. When you start a job you may be given an emergency tax code until HM Revenue and Customs provide your employer with the correct tax code. You can speed this process up by giving your P45 from your previous job to your new employer as quickly as possible.

If you don’t have a P45, you can complete a P46 and give it to your employer.

When your pay is calculated, you should receive 1/52 of your personal allowance tax free if you are paid weekly and 1/12 if you are paid monthly. Any earnings on top of this will be taxed. This is so that allowances can be spread throughout the year.

Self employment

If you are self-employed you must register with HM Revenues and Customs within 3 months of becoming self-employed. You can do that by calling 0845 915 4515.   

You will need to fill in a self-assessment form every tax year and you can submit this online.

International students who are here in the UK on a student visa are not allowed to be self employed.

Paying too much tax

If you think you have paid too much tax then you can ask for a repayment. If you are still working, you should contact the Taxes Helpline and tell them why you think you have paid too much tax. Your employer will give you a P60 after the end of each tax year and this will tell you how much tax you have paid.

If you have stopped working, you can complete a P50 to claim back any overpaid tax. You need to send it to HMRC, along with parts 2 and 3 of your P45, which your employer should give you when you stop working for them. If you are entitled to a refund of tax then HM Revenue and Customs will post it to you.

You can get more information on students and income tax here, including an online tax checker.