Do students pay tax? This is a question that's trending almost as much as Snapchat filters! The answer may shock you - yep, even students have to chip in for their fair share. Just like the rest of us mortals, everyone studying has an annual personal allowance (usually £12,570) and must lay down some cash - no exceptions here!
What is The Personal Allowance?
The Personal allowance is a set amount of money that everyone can earn annually without paying income tax. This currently stands at £12,570 for the 2022/23 tax year. If a student earns more than this amount, then they are legally obligated to pay tax on all income above their personal allowance.
What if I Earn Less Than the Personal Allowance?
If you are earning less than your personal allowance, then you don’t need to pay any tax until your earnings exceed the limit. For example, if you're working part-time during university and earning £5,000 per year, then you would not need to worry about paying tax until your income reaches £12,750 or beyond.
How Can I Make Sure I'm Paying My Tax Correctly?
It's important to keep track of all your sources of income so that you know exactly how much money you have earned during the course of a tax year. Ultimately, understanding your own individual circumstances and having an awareness about taxation will help ensure students stay on top of their finances and ensure they don’t have any nasty surprises. If you’re not quite sure things are as sweet as you’d like, you can always drop HMRC a line to check.