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Tax careers – your future?
Find out about exciting career opportunities in the world of tax and how to get started.

Tax for student money advisers
How you can help students with tax issues: guidance and training materials for advisers.

  • Tax essentials
  • Working
  • Volunteering and training
  • Tax credits and benefits
  • Tax refunds
  • Types of student
  • Going abroad
  • Other income
  • Student loans

Working

Got a job or running your own business? Sort out your tax from day one.

To help finance your studies, you might decide to work either on a full-time or part-time basis – for an employer (in other words employed) or for yourself (in other words self-employed). You might work regularly throughout the year, but more often than not you will work more hours over your vacations. Please note that many of the links go to our main LITRG website. 

All your earnings, whether from employment or self-employment, are liable to UK taxation if your earnings are sufficiently high. The UK income tax system works based on tax years that start on 6 April and end the following 5 April (for example the tax year 2020/21 runs from 6 April 2020 to 5 April 2021).The system works well for people with regular amounts of income, but, as a student, you may well not fall into this category: you might have more than one job at a time, move frequently between jobs, do work via an agency, take on an extra job during vacations, work overseas for a period of time, do a ‘sandwich’ course where you work for a year between periods of study or work for yourself.

You will need to take care that you do not pay more tax than you need to. If you are employed, your employer operates the Pay As You Earn (PAYE) system that takes both income tax and National Insurance contributions (NIC), if they are due, from your wages before paying you. However, as noted above, the PAYE system works best when you earn regular amounts of income from one employer. If you leave an employment part way through the year or have more than one job at a time, you may end up paying tax that you can claim back later. You need to take action because you may not be offered a tax refund automatically – and you only have four years in which to claim it.

Income tax deductions from your pay normally take into account any previous pay from that same employer (and possibly from other employers too) in the tax year. By comparing the amounts earned cumulatively and tax already paid, the PAYE system deducts the appropriate amount from your pay. This works well normally until you leave the employer or take a second job.

National Insurance contributions for employees do not work in the same way as income tax deductions: the system looks only at the contribution needed for that pay period. So earning a large sum in one week may lead to NIC being deducted from your pay that cannot be refunded, even though you normally earn a very small wage and ‘on average’ would not need to pay NIC.

On the other hand, you may ‘work for yourself’ and so are self-employed. If you are self-employed, you will need to deal with HM Revenue & Customs (HMRC) and you may need to report your own income to HMRC and pay over the tax and NIC personally. We provide details of the main tax issues facing the self-employed on our main LITRG website and our guide to self-employment explains the less common tax rules and contains more detailed information including a case study showing how to prepare accounts and what to include on your tax return.

Of course, some of the money you get may not be taxable – for example student grants, student loans or sponsorship money received. However, any student loan you get will have to be repaid, and it is usually repaid via the tax system while you are in the UK. In addition, you may receive some additional support if you are disabled or are a carer; alternatively you may receive tax credits or universal credit. You should check carefully whether any state support you receive is taxable.

If you have come from abroad to work in the UK, we suggest you also visit our International students section.

You may undertake temporary work through an agency, if this is the case you may want to refer to our information on agency workers on our main LITRG website which explains some of the tax issues you need to be aware of.

You may also undertake unpaid ‘work’ as a volunteer or intern to improve your chances of a permanent job in the future. If you are paid expenses in connection with this work, you may want to refer to our page I am a volunteer- are there any tax rules I need to be aware of?.

We cover taxation issues concerning both employment and self-employment, linking to our main LITRG website.

If you are not sure whether you are employed or self-employed, you should start by looking at our page Am I employed, self-employed, both or neither? as it is important you understand your employment status so you can get your tax right.

The pages covered are as follows:

Employed students

Am I employed, self-employed, both or neither?

What is the National Minimum Wage?

How do I work out my tax?

What income is taxable?

What tax allowances am I entitled to?

What tax rates apply to me?

How is my tax collected?

How do I check my coding notice?

Do I need to complete a tax return?

What tax do I pay on redundancy payments?

Employment benefits and expenses

What are benefits-in-kind?

What payments and benefits are non-taxable?

What if I incur expenses in relation to my job?

What travel expenses can I claim?

What if I use my own car for business purposes?

Pensions and employees

What National Insurance do I pay as an employee?

How do I repay my student loan?

What if I do not pay enough tax?

What if I pay too much tax?

What if I work abroad temporarily?

First time workers

You may also find our factsheets on the National Minimum Wage, What are National Insurance contributions? and What should I see on my payslip? helpful.

Self-employed students

Am I employed, self-employed, both or neither?

How do I register for tax and National Insurance?

What business records should I keep?

How do I work out profits, losses and capital allowances

How do I work out my taxable profits?

How do I prepare my accounts?

What business expenses are allowable?

Can I claim for pre-trade expenses?

What capital allowances can I claim?

What if I make a loss?

When do I make Self Assessment payments and file my tax return?

What tax allowances am I entitled to?

What is the trading allowance?

How do I pay tax on self-employed income?

What National Insurance do I pay on self-employed income?

What is the Construction Industry Scheme (CIS)?

How do I work out my profits or Universal Credit?

Do I have to pay VAT if I am self-employed?

What is Making Tax Digital for VAT?

Pensions and self-employment

How do I repay my student loan if I am self-employed?

Enquiries

You may find our factsheet Students in self-employment helpful.

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