“Business battle-axe” slams new tax rules affecting student workers

Business “battle-axe” Amanda Vigar, managing partner at Holmfirth-based V&A Bell Brown LLP, has hit out at HM Revenue and Customers over new rules that are causing “unnecessary worry and hardship” among student workers.

Thousands of students looking to earn extra cash this summer will no longer be able to ask not to have income tax taken from their wages by filling out a P38 (S) form.

This has prevented 20 per cent income tax being deducted automatically each month from students, most of whom will earn less than the annual tax-free personal allowance of £9,440.

Since April 2011, almost 4,000 forms have been issued by employers, according to HMRC figures.

However, HMRC scrapped the form in April and students will be paid under PAYE. This means anyone earning more than one 12th of the annual allowance each month – or £786 – could well be subject to tax.

Students can claim back the tax if they think their total income will be less than the annual personal allowance.

Amanda said:

“These new rules are utter madness and do not make any sense at all. It’s yet another example of HMRC bureaucracy where people are being asked to fill in yet more forms to claim money back that is rightfully theirs in the first place.

“I am already seeing cases where students, who are not the wealthiest section of society by any means, are facing increased financial pressure due to the time it takes to claim their money back.”

Amanda added:

“It is unfortunate to say the least that these measures have been introduced at all. Students now need more than ever to plan ahead when taking occasional work over the summer and not budget on receiving all of their wages for quite some time.

“To avoid any issues with getting their money back, they should make sure they get a P45 when they finish their job.

“This will show their PAYE code, total earnings and the tax paid. If they do not intend to work for the rest of the tax year, and have stopped working for at least four weeks, they can claim a refund by filling in a P50, available from HMRC’s website.

“If they continue to work part-time for the same employer during term time – say during weekends only they should be given a P60 at the end of the current tax year.”

Business “battle-axe” Amanda Vigar

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