Taxing question
Question
As a student do I have to pay tax on any money I earn?
Answer
Everybody, even students, has to pay income tax if they earn more than the personal allowance of £6,475. Once this amount has been earned there are two tax rates:
- Any income up to £37,400 will be taxed at 20%;
- Any income over £37,400 will be taxed at 40%.
In addition you will also have to pay National Insurance (NI) contributions if you earn more than £110 per week. All figures are for the 2009-10 tax year.
If you have a part time or several part time jobs your employers may well take tax and NI contributions from you if you earn more than £110 per week for NI and £124 per week for tax. But if, during the tax year (6 April - 5 April), you don't earn more than the Personal Allowance the HM Revenue and Customs will refund any overpayment of tax. They won't refund NI contributions but these will count towards your retirement pension.
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Question answered by CAB
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