Opportunity for students to keep holiday earnings

Opportunity for students to keep holiday earnings

PwC offers advice for students undertaking work experience in their holidays

UK-based students who do work during their holidays can keep all their
earnings and legally avoid paying incoming tax if they follow a simple procedure
and meet certain conditions.

PwC said all a student needed to do was complete a student exemption form
P38(S), be planning to continue being a student until after 5 April in the tax
year and not have a total income from all sources – apart from student loans,
scholarships and educational grants – of more than £5,035 in the tax year
2006/2007.

Leonie Kerswill, tax partner at PricewaterhouseCoopers LLP said: ‘The P38(S)
procedure is designed to make life easier all round. However, not all employers
may be aware of the procedure so students should always take the initiative and
ask their employer for the form – it could save the hassle of reclaiming tax at
the end of the year.’

PwC pointed out though that this procedure was only for holiday jobs and
would not help the student who has a regular Saturday job.

In addition, there is no exemption for National Insurance Contributions.

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