Tax and National Insurance

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Tax and National Insurance

As a student you are still liable to pay Income Tax and National Insurance contributions on your earnings.

Applying for a National Insurance (NI) number

You need an NI number so HM Revenue and Customs (HMRC) can keep a record of your contributions. It also acts as a reference number for Social Security purposes, and for employers to comply with income tax law.  

International students cannot get an National Insurance number before getting a job.  Information on applications for National Insurance numbers may be passed onto the Home Office so if you  have a restriction on working you should be aware of this.  

To get a National Insurance number, you need to arrange an ‘Evidence of Identity’ interview with Jobcentre Plus – telephone 0845 600 0643 to make an appointment.  

Working as an employee in term time and the holidays

There are special rules about tax for students who only work in the Easter, summer, and Christmas holidays.

These special rules do not apply to any of your earnings if you also work at other times i.e. during term-time. The normal rules for tax and National Insurance will apply to all your earnings, (term time and holidays) in the same way that they do for other people who are not students.

Income Tax

If you had a previous job, your employer will have given you a form called a P45 when you left. Give this to your new employer. If you have no P45, or you left your last job in an earlier tax year, you will need to complete a P46 form instead. Your new employer will provide this form.

Your new employer will use the P45 or P46 form to find out your tax code from HMRC. Using the tax code, your employer can work out correctly any tax you must pay.

If you have more than one job at the same time, you should contact HMRC to get a different tax code for your second job.

You will only have to pay tax if you earn more than £11,500 in the tax year 2017/2018. The tax code and the Pay As You Earn (PAYE) system spread any tax due across the year as evenly as possible. In this way, if you work throughout the year, you will pay the right amount of tax. If you give up work part way through the year, a refund may be due.

National Insurance Contributions (NICs)

You pay the same NICs whether or not you are a student. Your employer will deduct NICs from your pay if they are due.
NICs will be due for any week in which your gross pay (before deductions of tax and so on) is over £162 a week.
NICs are due on your pay for the week or month, so you will not get a refund if you stop working part way through the tax year.

Working as a self-employed person while you are a student

There are no special tax rules for you if you are a student and also self-employed. You will be treated in the same way as other self-employed people.
You must tell the HMRC if you start working as a self-employed person within three months to avoid paying a penalty. Later, they will send you a tax return, on here you will need to declare your earnings from being self-employed.

Useful Links

HMRCInformation about students working part-time and in the holidays

Low Incomes Tax Reform GroupTax guide for students


DirectGov 

Basic NI information
Information on Income Tax
Tax advice for students
Citizens' Advice 

Help with tax problems
Information sheet on National Insurance