Tax Rebates & Refunds

Filing for a tax rebate if you are a student

March 2, 2011
Posted in Income Tax — Written by Geoffrey

There is a popular misconception in the UK that students are exempt from paying income tax. Students are however liable to pay income tax like everyone else in the UK. This confusion is mostly due to the fact that students earn less than a regular income earner so don’t use their tax free allowance.

The current tax free 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 the HMRC. Although the majority of students earn less than £6,475 a year, a lot of students end up paying too much income tax.

How can a student be entitled to a tax rebate?

Students will be due a tax rebate if – they have paid their income tax under the wrong tax code or they paid tax on their savings when they did not need to. They may have also left a job before the end of the tax year. If you fit into any of the above scenarios, you may be due a tax rebate.

How can you be on 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 up and shared between all your jobs, a lot of complications can arise. If the combined income from both jobs goes above the tax free allowance, it may lead to overpayment of income tax. In such a case, students can apply for a tax rebate at the end of the tax year.

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