Students issued tax warning
The vast majority of people who earn money are keen to ensure they do not pay too much income tax. For this reason, some use an income tax calculator or PAYE calculator to help them assess whether or not they have.
Students may be among those who can benefit most from such activity, research conducted by one organisation suggests.
According to the Low Incomes Tax Reform Group (LITRG), around six million people are likely to now be receiving tax calculations having not paid the right tax under Pay As You Earn (PAYE), and students are particularly at risk of this.
The reason for this, the organisation claimed, is that such people can find that the system struggles to keep up with their working patterns. For example, undergraduates may be working in several jobs at once, frequently moving between roles, doing irregular work with agencies or be involved in a ‘sandwich’ course during which they work for a year.
Students are advised to keep on top of their income deductions, which may involve using an income tax calculator or PAYE calculator. Not only may mistakes mean they overpay, but they may also result in such people paying too little. In such cases, they could be hit with an unexpected bill at a later date.
With this in mind, LITGR issued advice to students. For example, it stated: “If you start a new job without a P45, but your former employer later gives you one … you can still give it to your new employer for them to adjust your tax code.
“But otherwise, you might need to keep an eye on your payslips and contact HMRC to chase up processing of your P46 to make sure you get put back on a cumulative code if it doesn’t appear to be done automatically.”
Earlier this year, HM Revenue & Customs revealed that a number of people had either under paid or overpaid tax and it sent out correspondence to inform these individuals of the errors.
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