Taxing question
Question
As a student do I have to pay tax on any money I earn?
Answer
Everybody, even students, has to pay tax if they earn more than the Personal Allowance of £6,035. Once this amount has been earned there are two tax rates:
- 22% on taxable income of £0 to £34,800
- 40% on taxable income above £34,800
In addition you will also have to pay National Insurance (NI) contributions if you earn more than £105 per week. All figures are for the 2008-09 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 £105 per week. But if, during the tax year (6th April - 5th 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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