Tax Deductions ???

[bubbly2000]

My 19yr old full time student daughter has a part time job at Tesco working 17 hours a week for the last 6 months. Now it's the new tax year they have stopped her emergency tax. Can anyone explain why and how or will she get it back. Thanks

[Zacs-Master]

What was / is she being payed?

[DJHawkes]

full time students don;t pay tax, did she not fill in the right form when she started at tesco? She should get all her tax back for 2012/2013 but they need to know she is a student. why was she on an emergency code anyway?

[DJHawkes]

your daughter won;t have earned over £8100.00 will she? unlikely.

[Zacs-Master]

I don't think that's correct DJ. Are you confusing things with students who only work in the holidays?

[ChuckFickens]

Surely there is a hint in the phrase "emergency tax"

Emergency tax codes are used when there is insufficient data to work out what the proper tax code is, normally due to a P45 not being available from a previous employer, but as the emergency tax code is the same as the basic tax code then it shouldn't make any real difference.

"full time students don;t pay tax"

Load of rubbish!

[ChuckFickens]

At 17 hours a week your daughter would have to be earning over £10.67 an hour to be required to pay any tax at all.

[Zacs-Master]

Hence my original question.

[DJHawkes]

it's not rubbish, full time students are not employed full time in retail, it's about flexibility and availability hence they hardly earn enough to pay NI let alone tax, but i only have 40 years retail experience and the experience of hiring dozens of students over several decades to base my reply on. Obviously i should have just googled the answer lol

[factor-fiction]

Full time students are taxed no differently to anyone else, but normally their income is below the threshold.

Last tax year bubbly's daughter probably didn't earn enough to pay tax in the last tax year given that she only worked for half the year.

This year if she works 17 hours a week her income may just exceed the personal allowance (although I'm surprised unless she also does overtime). HMRC will deduct tax on the basis that she'll work for the whole of the tax year. If she later reduces her hours they may stop deducting tax and start refunding a bit of it, depending on her cumulative earnings.

If she leaves Tesco during the tax year she won't immediately get a tax refund since for all HMRC know she may get another job.- she may have to wait until the year end.

However I'm surprised that her income justifies paying tax. maybe they don't have a new tax code for her. If her weekly wage is below around £180 a week she should query with HMRC why she's paying tax

[ChuckFickens]

You stated "full time students don;t pay tax"

That is a load of rubbish... full time students are subject to the same tax rules as anyone else, generally they don't earn enough to require them to pay tax, but that doesn't mean you can make a sweeping statement saying "full time students don;t pay tax"

[New Judge]

Tesco probably do not have a valid tax code for your daughter for the current year. She should ask her wages department if this is so. If it is that explains why she is having tax deducted on an "Emergency" basis. Her employer will stop her 20% of her earnings.

She needs to contact her tax office (Tesco should be able to tell her the contact details) and get them to provide Tesco with a tax code. Once they have this they can deduct tax as appropriate . As has been explained she should pay no tax on her low earnings and the PAYE system will enable Tesco to refund the amount overpaid.

[Sycamore3House]

ChuckFickens has answered why she has paid emergency tax. To get back any tax overpaid for last year get her to phone the tax office and ask what she needs to do. Some of the info would be own her wage slip but there will probably be more info on her P60 which she may not get until mid May.
If a student works enough hours to pay tax they are obviously not at their college or university studying if a student only works during the holidays or part time they will not reach to tax threshold anyway.

[factor-fiction]

I agree, Sycamore3House, except I don't think there is any tax to reclaim for last tax year (as I read it that none was deducted)- any refund of tax will be for this tax year when it seems she is incorrectly on the emergency tax code at present.

[Milvus]

I don't think you are right New Judge. Emergency Tax gives basic tax allowance only, so she would only pay tax on earnings above that pro rated annual allowance. I don't know last years allowance but the current allowance is £9440 per year or £786 per month

[factor-fiction]

Emergency code may be the wrong term for what's happening here- is it a BR code that's applied when a 20% deduction is applied to all earnings. Or the OP may just mean some tax is being deducted.
Perhaps when OP returns to the thread we may get a bit more information about the current level of earnings , the tax code and how much tax is being deducted

[bubbly2000]

Thank you everyone...Her basic pay is around 6k per yr. She asked the supervisor at the store who told her she has to ring the tax office and sort it out herself. All her payslips say E63C, not sure what this means, she was stopped £97.20 in October but refunded in November. Now in April they have stopped £83, It's all very confusing

[Hopkirk]

If 'emergency tax code' appears as 'BR' on the wage slip, then New Judge is absolutely right - they stop tax at 20%, which is the maximum a basic rate taxpayer could pay.

[ABerrant]

Dot - It used to be the case that students working solely in the holiday periods (summer, Christmas, Easter) and earning below the personal allowance were able to receive their wages without Income Tax being deducted by completing a P38(S) student exemption form. The student exemption did not apply to students who also worked during term time, such as the OP's daughter is described as doing. In any event, as of this tax year the P38(S) has been scrapped and all students are now part of the usual PAYE process.

[bubbly2000]

So what does the coe E63C mean

[AlwaysConfused]

The amount of time people have a go at personnel at work for tax issues amazes me. It is down to the individual to sort out tax code problems. DJHawkes is misguided, it's not that student do not get taxed, it's just that they do not usually reach the threshold for paying tax.