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Tax Tip

Are you employing students over the summer? 24/08/11

If you are, don't forget to give them the HMRC form P38S (2011) to sign. This form allows the student to earn their full annual allowance of £7,475 from their holiday work before any tax is deducted.

To qualify, the student must confirm they are to return to full time study at a named college, school or university for a course that will continue until at least 5 April 2012. The student must also not have employment during term time.

National minimum wage (NMW) rates do apply to students and part-time employees. For workers aged 18 to 20 inclusive the current NMW rate is £4.92 per hour, 21 and above £5.93.

NI deductions are not exempt; if the student's pay is at or above the earnings thresholds (£136 for employers contributions, £139 for employees contributions per week), you must deduct employees NICs and pay the appropriate employers NICs.

For a full list of current rates of PAYE and NI got to:

If you need any help and advice with your Tax compliance, contact Lavinia Newman, Stuart Coleman or Tonmoy Kumar NOW to discuss how ABDS can help in all your financial planning and business advice.

ABDS Chartered Certified Accountants of Southampton.
Tel: 023 8083 6900  E-mail:

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