Too much income tax is often deducted from the wages that students and school pupils earn from their part-time jobs during the school holidays. This income tax can, of course, be claimed back using what used to be known as a T-form. The “T” stands for ‘refund’. Nowadays, this is done ‘as normal’ digitally via the Tax and Customs Administration’s web portal: MyTax Office (or, even more modern: via the app) to submit your income tax and national insurance contributions return.
Tax credits
The reason too much income tax is deducted is down to the system used to calculate that tax. Under this system, the year is (usually) divided into 12 or 13 instalments. Wages are paid monthly or every four weeks. And a portion of the tax credits is allocated to each of these instalments. As a result, someone who does not work for the whole calendar year does not claim the full tax credits via their income tax.
Payroll tax is a withholding tax on income tax, calculated on a calendar-year basis. Tax credits not taken into account in the calculation of payroll tax are subsequently applied in the income tax assessment.
Student and Pupil Scheme
If the student and pupil scheme is applied, the employer calculates income tax on the basis of the quarterly table. In practice, this means that no income tax is deducted. The student or pupil is then, of course, not entitled to an income tax refund at the end of the year (and does not need to submit a T-form).
The student and pupil scheme may be applied:
- if the pupil or student is entitled to student finance or a contribution towards their study costs on the first day of the term;
- if the pupil is entitled to child benefit on the first day of the term;
- for students and pupils from another EU country, Iceland, Norway, Switzerland and Liechtenstein, provided they hold a International Student Identity Card (ISIC).
The student or pupil must indicate that they wish to have income tax deducted in accordance with the student and pupil scheme. This can be done (though not necessarily) via a form which the Tax and Customs Administration makes available for that purpose.
If a student or pupil no longer meets the conditions for the student and pupil scheme, they must withdraw from the scheme themselves. This can be done using the same form that was used to enrol in the student and pupil scheme.
Scheme for students and school pupils under the employees’ social insurance schemes
A special scheme for students and school pupils applies to employee insurance contributions in the following sectors:
- agricultural;
- construction;
- cultural institutions;
- hospitality sector;
- painting firm.
Students and school pupils: PLEASE NOTE
Additional income may result in your entitlement to child benefit or student finance being reduced or even withdrawn entirely. If this is the case, you must report it to the relevant benefits agency. Failure to report this, or reporting it too late, may result in sanctions being imposed, in addition to the recovery of any amounts paid in error. We explain this in our article ‘Children earning extra income’.
Want to know more?
Would you like to find out more about the pay of students and school pupils, or about setting out the rights and obligations relating to the work of these employees?
Please get in touch with one of our (payroll administrators).