July 2017 newsletter
Welcome to another regular newsletter from the Tax Guide for Students (TGFS) website. The purpose of the newsletter is to highlight any topical tax issues which may affect students, apprentices and student money advisers.
In this newsletter, we discuss student loan repayments and what to know if you have graduated this summer and also if you are an international student leaving the UK what tax refunds you may be able to claim. We also link to recent news articles from the Low Incomes Tax Reform Group (LITRG).
Student loan repayments
If you have graduated this summer then you will want to understand when you may need to start repaying your student loans. If you are starting employment soon and are concerned that you have to start repayments then don’t worry; repayments for graduates only start the April after they graduate (so if you have graduated this summer, loan repayments may start from April 2018) AND you need to be earning above the repayment threshold of £21,000 per tax year for plan 2 loans.
It is important that you notify the Student Loan Company if you change address or if you are going to be working abroad because there are different repayment thresholds if you are not based in the UK.
Many international students will be leaving the UK for the summer break. Depending on individual circumstances there may be some tax that you can reclaim, perhaps if you have been working during the academic year or you have purchased certain goods and are leaving the European Union.
For example, if you have been working alongside your studying and you are now leaving the UK and will not return during the current tax year (the tax year runs from 6 April to 5 April), then you should consider whether you have overpaid income tax and are due a refund. This often happens if you are paying tax on your wages as your tax is calculated as if you will be earning the same amount all through the tax year. If you stop working part-way through the tax year then you may not have used all your personal allowance (the tax-free amount available to most people who are tax resident in the UK), which is currently £11,500. If you think you may be due a tax refund then our webpage explains what you need to do.
Don’t delay if you think you are due a tax refund as there are time limits on when you can claim!
If you are leaving the UK and going to a non-European Union country then you may be able to purchase some goods, but not services, without paying VAT. VAT is a tax on goods and services, usually at 20%. If you qualify for this ‘tax-free shopping’ then you will receive a refund of the VAT on the goods you are taking out of the UK. For further details on the conditions see the HMRC notice 704/1.
12 June – Any questions? Tax credits
16 June – Any questions? Staring self-employment
19 June – Any questions? Employee travel expenses
14 July – Missing out on job expenses tax relief?
18 July – Check your coding notice carefully!