Tax Rebates & Refunds

Student tax rebates in the UK

February 28, 2011
Posted in Income Tax — 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 most students earn less than the yearly tax free allowance.

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 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 every year.

Why does this happen?

Students can 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. Students can pay excess tax even if they leave their jobs before end of the tax year.

If you are a student and have paid excess taxes because of any of the above circumstances then you are entitled to a tax rebate.

Tax code misapplication

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 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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