Tax Rebates & Refunds

The process of claiming tax back as a student

November 23, 2010
Posted in Tax Rebates — Written by Chris

There is a popular misconception in the UK that students are exempt from paying income tax. Young students are also liable to pay income tax like everyone else in the UK. This confusion is mostly due to the fact that students often earn less when compared to the yearly tax free allowance they are entitled to.

The current threshold is set at £6,475 per year. As most students earn less than the tax free allowance, they can get a complete tax rebate from HMRC. Although the majority of students earn less than this in a year, lot of students end up paying an excess of income tax every year.

Why students can be due a tax rebate?

Students can be due a tax rebate if –
• They paid their income tax under a wrong tax code
• They paid tax on their savings while they did not need to
• Left a job before the end of the tax year

If you fit in with any of the above scenarios, you may be due a tax rebate.

Paying tax under the wrong tax code

This situation generally arises when students hold more than one job at a time. As the annual tax free allowance is unable to be split and shared across all your jobs, a lot of complications can arise. If the combined income from both jobs exceeds the tax free allowance, it may lead to an overpayment of income tax. In such a case, students can apply for a tax rebate by the end of the tax year.

No Comments (Leave comment »)

No comments yet.

Comment RSS | TrackBack URL

Leave a comment