Yes! Many students are shocked to find that they have paid income tax but everyone who works in the UK is treated the same when it comes to paying ‘income tax.’ Everyone has the same personal tax allowance that they can earn each year, tax free. Income tax is managed by the Government agency HM Revenue & Customs (HMRC).
The annual personal allowance of £6,035 for this tax year 2008-2009, equates to being able to earn approximately £116 per week (or approximately £502 per month if you are paid monthly) tax-free. As soon as you earn above your ‘Personal Allowance’ for that week/month you then pay income tax. So:
If you earn below £6,035 in this tax year you will not get taxed.
If you earn above £6,035 and up to £34,800 this year, the income tax will be 20%.
If you earn over £34,800, the income tax will be 40%.
As long as you do not exceed your Personal Tax Allowance for the year, then you should be in a position to claim back any tax you have paid.
It’s worth knowing that if you have gone over your tax allowance during some weeks (e.g. vacation periods) and got taxed in those weeks/months, but then kept below it during others, then your tax over-payments may well appear back in your wages as a tax rebate or refund – as long as you stay on track to fall below the Personal Allowance for the entire year. You will see any tax rebate shown clearly on your payslip.
If you are sure you are owed over-payments of tax, there are two occasions when you can ask to claim this back:
At the end of a tax year (April)
Your current employer will issue you with a P60 at some point in April/May 2009. This is an ‘end of year’ tax statement showing your total earnings from that employment, and total tax paid for the year. If your ‘earnings’ box on the form shows less than £6,035 (in April 2009) and your ‘tax paid’ box shows a figure, then you can claim that figure back. Simply go in to the Birmingham HMRC office with your P60, and this will be sufficient evidence to claim back your tax. If your employer does not automatically issue you with a P60 by May at the latest, please ask for it, as you are entitled to receive one. Go to see the HMRC office if your employer does not give you your P60 – and take your payslips with you instead.
After leaving a job
After you leave your employment, your employer will issue you with a P45. Your P45 is your ‘end of employment’ tax form. It shows how much you have earned with that employer in that tax year (since 5th April) and how much tax you paid in the same period. If the earnings are below £6,035 (tax year 2008-2009) and your P45 shows that you have paid some tax, then you may be entitled to claim this back.
(The important thing to be aware of is whether you are going to get another job in that tax year, and will this take you over the Personal Allowance limit? For example, if you leave your job in January, and you have earned, say, £5,800, and you know you will not get another job between January and April, and then claim the tax back).
To claim back your tax with a P45, take the P45 in to the local HMRC office, and you will be asked to fill in a P50 form in order to make your claim. Alternatively you can download a P50 online at: http://www.hmrc.gov.uk/pdfs/p50.pdf
It is OK to wait until the end of a tax year, but don’t leave it too long after the April has passed. It is more difficult to claim back tax from previous tax years, but it should be possible, as long as you keep your paperwork (P45s, P60s, payslips).
A National insurance number to ensures that should you need to, you can claim benefits or use the National Health Service. You will usually receive your NI card and number shortly before your 16th birthday if you live in the UK.
If for any reason you do not have a National Insurance Number you can apply to get one by contacting JobCentre Plus on 0845 600 0643 (This telephone number is for National Insurance Number allocations only). You will be required to have an “Evidence of Identity” interview which is necessary for you to gain a NI number
As an international student you can apply for a National insurance number. Please see the leaflet ‘Find Your Way to Work – International Students: Working in the UK 2007-2008’ for more information on international students and National Insurance numbers. This new leaflet will be available from the Job Zone shortly, or you can download it at: http://publications.teachernet.gov.uk/eOrderingDownload/DIUS-00338-2008.pdf
No, this shouldn’t stop you from claiming back your tax. However, a permanent NI number does make it easier for the HMRC to keep a track of your records. As the Job Zone always advises you to apply for your permanent NI number as soon as you have secured your job, it is likely that, by the time you come to claim back any tax, you will have your permanent number.
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