Are you a mature student? No, this isn’t a trick question. Traditionally the view has been that a mature student is over the age of 21 when starting a course. More recently the term is applied to anyone who has had a break between leaving one form of education and then starting further training.
The tax rules treat you in the same way as other students, but as a mature student you may have some different issues arising compared to the more traditional student. Below, we explain some of the common scenarios mature students may face which could cause you to interact with the tax system. Please note that some of the links are to our main LITRG website.
You may have given up a job to return to education. Most courses start from September, however the tax year runs from 6 April to 5 April so if you have been working from April to September and then you stop it could be the case that you have not used all your personal allowance. If so, then you may be due a tax refund; the page How do I claim back tax I have overpaid through PAYE on wages or pensions? explains how you can claim a refund before the end of the tax year, if you want.
It may be the case that you have recently been made redundant and have decided to study for further qualifications; if so you will need to understand how any redundancy payment may be taxed. The page What tax do I pay on redundancy payments? covers this.
You may have built up savings while working, you should ensure that you know whether these savings are and should be being taxed. For further information see Savings and tax on our main LITRG website.
If you are taking a break from working, then you may want to consider your National Insurance contribution position. By paying National Insurance you have been building up your entitlement to certain benefits, such as the state pension, however, by stopping work to study you may find that you have not made overall sufficient contributions. You can find out how much state pension position you are expected to receive at GOV.UK, and based on this you may decide to make voluntary Class 3 National Insurance contributions. There is more information on National Insurance in the Tax basics section. Do bear in mind you may be eligible for National Insurance credits if you are claiming child benefit, for example.
If you have savings, then depending on your total taxable income it could be the case that your savings may not be subject to income tax or may qualify for the starting tax rate for savings. Further information is available on our main LITRG website at the Savings and tax page.
You may have family responsibilities that entitle you to claim certain benefits or tax credits; this extra income could help you while you are studying. There is more information in the tax credits and benefits section. In addition, if you have responsibility for looking after a child, you may receive National Insurance credits. You can read more about this in our tax basics section.
It could be that you have retained a part-time job to finance your studies or you are working full-time and studying at weekends or during the evenings or perhaps you are on a sandwich course. If you are trying to juggle work and studying you will need to make sure that you are not overpaying tax and, if you are, then remember to claim a tax refund.
The first thing you should do is check that your PAYE code is correct on your payslip: this will affect what tax allowances you are receiving. The Employment section on our main LITRG website covers how to check your PAYE code and what to do if it is wrong.
If you have two or more jobs, neither of which pays enough to use up your personal allowance, you can contact HMRC and ask them to split your personal allowance between the jobs. This will mean that you do not pay too much tax during the year. Our factsheet on Having more than one job provides further information on this.
If you think you have overpaid tax, then you could be entitled to a tax refund. The page How do I claim back tax I have overpaid through PAYE on wages or pensions? on our LITRG website explains how you can reclaim overpaid tax within the allowed time limits.
It may be the case that your employer is paying for you to study in order to help you with your current role. If so, you may be exempt from tax and National Insurance contributions on that sponsorship income; there is information on what conditions need to be met for employer-sponsored courses in the volunteering and training section.
There is usually no tax relief on these payments so you should ensure you are paying your course fees in the way that best uses your financial resources. Be careful if you sell assets (things) to help pay your fees. You might create a charge to capital gains tax that you can read about on our main LITRG website.