6 September 2012    |    Uncategorized

P38S – Student tax scheme – scrapped

From April 2013, the student tax certification scheme will be abolished, and students will require to be taxed in the same way as ordinary employees.

To a large extent this is due to the planned introduction of Real Time Information  (“RTI”), which is planned to provide faster updates to employers, meaning that students should move from emergency Week 1 codes to normal cumulative codes more quickly.

The change is also partly due to the compliance failures of employers.  The scheme only operates for students who work only during university holidays, but many employers assume it applies to all earnings of all students.  To often it is assumed that NI is not due, when it always is due on the normal basis.

From April all students will have to follow exactly the same processes as all other employees, completing P46 forms or providing a P45.

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