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These notes provide basic information on the questions students most frequently ask. They do not cover all topics or situations. Students are liable to pay Income Tax and National Insurance on the same basis as anyone else but the Student Loan and any additional grants are not counted as part of your taxable income.

If you work part-time during term-time or during the vacation, you may have to pay tax and National Insurance, depending on how much you earn.

All employees are required to have a National Insurance (NI) number. When you start work you will be asked it. This allows the employer to deduct contributions which everyone who earns over a certain amount every week has to pay.

If you have not worked before, you will not have a NI number, but you do not need to have a number to start work. You cannot normally get a NI number before you have a job, but once you have been offered a job, you must apply for one.

To apply for a NI number you will need to contact your local Jobcentre Plus Office (addresses and phone numbers can be found in the Phone Book under ‘Jobcentre Plus’). Telephone your local office and ask for an appointment to apply for a NI number. You will also need to check what identification documents to take in addition to your passport.

It can take several weeks for your NI number to come through. In the meantime, you are allowed to work and you should ask the Jobcentre Plus to give you a letter to confirm that you have applied. Your employer can deduct contributions on a temporary number while you are waiting.

You will be liable to pay UK Income Tax on the same basis as UK residents. There are no special exemptions for students, except that if you are only working during the vacations and you do not expect to earn over a certain limit, your employer can give you a form P38(S) so that tax is not deducted. Information Sheet F1 ‘Income Tax and National Insurance’ gives more details.

Everyone is entitled to a Personal Allowance which is the amount of tax free pay they can earn. Anything earned over this amount counts as taxable income.

If you are working for an employer, your employer will deduct the tax from your pay under Pay As You Earn.

You get an equal proportion of your personal allowance every week or month, depending on how often you are paid. You do not get paid tax-free until you reach £4,895 and then start paying tax.

Couples and lone parents with dependent children where both partners are working at least 16 hours per week or
people aged 25 or over working at least 30 hours per week
people with certain disabilities working at least 16 or hours per week
people aged 50 or over working at least16 hours per week and who are returning to work having been on certain benefits.

The amount of WTC you may get depends on your circumstances, but it is a low income benefit.

People who are responsible for at least one child up to the age of 16 or
Aged 16 to 18 and still in full time education (school or college, not higher education)
16 to 18 and recently left full-time education and now registered with the Careers Service or the Connexions Service

Students who are subject to Immigration Control (eg International Students) are not eligible for Tax Credits

When you start work, you will be asked for your P45. This is the Inland Revenue form showing how much tax was deducted in your last job. If you have not worked before, you should ask your employer for form P46 which will enable you to get the correct tax coding.

The usual tax code for a single student will be 503L (this will appear on your wage slips).

If you have the tax code 503LX or 503L1, it means you are on emergency code while your proper tax code is being sorted out.

If you have more than one job, you can apply to your tax office to have your tax allowance split between the jobs, otherwise you will only get your tax free pay on one job and will pay full tax on the other/s.

If you are only working during the vacations, you can ask your employer for form P38(S). This allows you to be paid without deduction of tax. If you work during term-time, you cannot apply for this concession.

If you were working before you came to the College, but do not intend to work again in the current tax year, it may be possible for you to get a refund of any overpaid tax.

You should contact the tax office which dealt with your last employer to check the position. You will need to send in form P50. If you are claiming a refund at the end of the tax year, send in your P45 or P60 (this is the form employers give at the end of each tax year to show how much tax has been paid).

If you are employed, your employer will deduct contributions from your pay. However, you will not be liable to pay contributions if you earn less than £97.00 pw in the 2006/2007 tax year.

If your earnings are more than £97.00, you will pay 11% on the balance over that sum up to earnings of £645 per week and then 1% on earnings over £645 per week.

Full-time students are not liable to pay National Insurance contributions unless they are working and earning over the lower earnings limit mentioned above. However, students over the age of 18 do not get credited with contributions either.

In a few cases, it might be advisable to make Voluntary Contributions (Class 3), currently £7.55 pw, in order to protect your National Insurance record and ensure that you eventually receive a full pension.

Voluntary Contributions do not count towards short-term benefits such as the Jobseeker’s Allowance. They only count towards Retirement Pension, Widowed Mothers' Allowance and Widows' Pension.

If you are concerned that you may not have enough years of contributions for a full pension, or if you are a widow, a married woman or a divorced woman or have worked abroad, it may be advisable to check whether you should pay Voluntary Contributions.

You can get free leaflets and further detailed advice from your local tax office or Tax Enquiry Centre. The address and phone number can be found under `Inland Revenue' in the phone book, or from the Inland Revenue Website: http://www.hmrc .gov.uk

For information on the Certificate of Exemption from Class 2 contributions (for those with small earnings from self-employment) please contact:

Inland Revenue
National Insurance Contributions Office
NI Services to Contributor
Benton Park View
Newcastle Upon Tyne
NE98 1ZZ
Tel.: 0845 9154655