Do Students Need Income Tax and National Insurance?

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  • Do Students Need Income Tax and National Insurance?

It is a common misconception that students don’t have to pay income tax in the United Kingdom. Unfortunately, you do. It’s just that their total income doesn’t usually take them over the personal allowance. The personal allowance is the amount that is set by the Government on a yearly basis that you can earn each year without having to pay any tax.

We detail out below an overview of how income tax and national insurance affect students.

Income tax how is it dealt with?

Income tax is charged on all assessable income in the tax year, and the tax year runs from the 6th April to the 5th April every year. Every resident in the United Kingdom has a personal allowance which is an amount that they can earn without having to pay any tax.

The personal allowance is worked out based on a set figure every year, this is set by the Government in their budget speech. For instance, this could be £12,500.00 per annum that you can earn without having to pay any tax. You may find that your personal allowance may be bigger if you claim marriage allowance or any blind allowance. If you have an income that is over £100,000.00 per annum, then your personal allowance does go down.

If you don’t earn any money during the tax year that is over and above your personal allowance, then you won’t have to pay any income tax. Any amount over and above your allowance is then taxed at 20% for the initial part. This can increase when and as you hit a higher bracket and can be upwards of between 40% and 50% depending on what band you are in. You should refer to the Governments website at any one time for what the personal allowance is.

Do I pay tax on my savings?

Interest on your savings may be taxed as well at 20% initially. But if you are on a low income you may be able to avoid this tax for instance tax savings on interest. Most people can earn interest on their savings without paying tax. You can have up to £5,000.00 in interest tax free and this is your starting rate of savings. The more you earn from the above income the less your starting rate for the savings will be. If your income is over £17,500.00 or more then you are not entitled to anything. You can also save or invest your money in a tax free with individual savings account called an ISA.

What is an ISA?

The term ISA stands for individual savings accounts and allows you to save tax free into a cash savings or investment account. ISA’s are offered by Banks, Building Societies, Insurers and Asset Managers and National Savings and Investments.

What are the different types of ISA’s?

There are five different types of adult ISAs all of which have the advantage of being tax free. But unfortunately, that is where their shared similarities end.

These are as follows: –

Cash ISA – this is basic ISA and allows up to £20,000.00 tax free.

Stocks and Shares ISA- This allows up to a £20,000.00 allowance tax free gains, no further tax on dividends or tax-free interest.

Innovative finance – peer to peer lending account – £20,000.00 allowance and tax-free interest

Help to Buy ISA – this is a savings account for first time buyers £3,400.00 in the first year. £2,400.00 thereafter. 25% top up, tax free interest and closes to new savers from the 30th November 2019 unfortunately.

Lifetime cash ISA – £4,000.00 allowance, 25% top up, tax free investment, only those between 18 and 39 can open.

Lifetime stocks and shares ISA – £4,000.00 allowance. 25% top up, tax free gains and no further tax from dividends, tax free interest and only those between 18 and 39 can open.

There are two further ones for junior people.

Not all your income is taxable. Student grants and bursaries and all scholarships are tax free. Sometimes private scholarships are taxable so you should confirm that such payments are tax free.

Tax is collected either through your employer in a system known as pay as you earn (PAYE) or through a self-assessment process if you are self-employed. To find out and check whether you are paying the right amount of tax then don’t hesitate to look at the Government website.

Overpaying tax

Do people overpay their tax? Almost about 8% of full-time students who work doesn’t exceed their personal allowance in the year could be overpaying their tax. But, due to the way the tax is calculated students sometimes do overpay their tax?

The main reason for this is student income often varies considerably during the year. For example, you might work full time during the summer vacation and only part time during the term. Therefore, although your overall earnings don’t exceed your personal allowance, or only do by a small amount, tax may be deducted in the summer on the assumption that your earnings will continue for the full tax year.

If you have overpaid tax you can reclaim it and can do so for up to six years after the tax year for which you are reclaiming. But it is for you to reclaim the tax not for the Government to pay you back.

Reclaiming your overpaid tax

If you believe you have paid too much income tax you can apply for a refund. You can do this through your local tax office and it is straight forward. You will need to prove your earnings such as by way of a P60 or P45 from your employer.

Some private companies offer to reclaim the tax on your behalf but then take a cut of any refund that is due often around 20%. We recommend that you do this yourself.

You can find out more by going on the Government website which it has a section student jobs paying tax.

There is also low-income tax reform group that you can look at being LTRG. Which provides help and information to those that can pay for tax and national insurance advice. Taxaid.org.uk also has a website that may be able to help you.

National insurance what is it?

In addition to income tax National insurance may also be payable from your earnings. National insurance is a contribution to help pay for the benefits including the state retirement pension.

If you earn paid work between £146.00 and £817.00 per week you will have to pay a national insurance rate at 12% of your earnings. If you earn more than £817.00 per week you pay an extra 2% on top. But this can change from year to year and in different governments and through the budget.

National insurance is the same as it is with tax for students. You must make contributions, but they aren’t deducted from student grants or loans.

You should find that if you have an employer, he will automatically deduct the National insurance from your wages on a weekly or monthly basis depending on how you get paid. He then pays this over to the Government.

We hope that the above is helpful but if you have any queries then the Government websites are useful and helpful, and they will be able to show you what you need to know. Click here to be re-directed.

Are you currently looking for houses to rent Brighton? Call us today to book in viewings and find your perfect property 01273 724000.

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google-review Review
Cat Westmacott
Cat Westmacott
17:57 10 Jun 24
Generally helpful for Lettings. As with any company, sometimes need a push for a response, but often easier to speak on the phone than email. Feeling hopeful for the next year’s contract with Harringtons🤞.
Kirsty Turner
Kirsty Turner
20:50 04 Jun 24
Great experience. Everyone is so lovely and helpful over the phone at Harringtons! The best experience we have had with a letting agent in Brighton, none of the other agents in Brighton have been bothered to keep in touch and help us find a property as much as these guys. A special shoutout to the lovely lady who showed me around the flat (Georgie I believe -sorry if I got that wrong), great at answering all my questions and been very lucky in securing the first property we viewed with her (an amazing spacious flat that has everything we need - including nice storage space for our paddleboards!) Looking forward to moving into our seaside home. Thank you!
Shadan B
Shadan B
23:31 30 May 24
Great experience, very helpful staff and friendly. I wish you all the success. Thanks for your care. 💐😊
Rachel Roberts
Rachel Roberts
21:13 30 May 24
Best experience I've had with a letting agent!
Charley Besant
Charley Besant
10:25 30 May 24
So far the process with Harringtons has been amazing. We viewed 3 properties with Georgie and each time she was so informative and kind, she gave us the time we needed in each property to look around, take videos and ask questions about everything. The whole process has been easy so far and I can now happily say we found our property thanks to Georgie and the team at Harringtons.
Ainhoa Negro
Ainhoa Negro
09:15 30 May 24
Georgie at Harringtons Lettings in Brighton has been exceptional throughout my rental process. From the very beginning, her professionalism and friendliness stood out. She provided clear and prompt communication, ensuring all my questions were answered thoroughly. Georgie made the entire experience seamless, from viewing properties to finalizing the paperwork. Her attention to detail and genuine care for my needs made me feel confident and supported. I highly recommend Georgie and Harringtons Lettings to anyone looking for a top-notch rental experience in Brighton.
PRBL1
PRBL1
09:11 30 May 24
Joel Starcross
Joel Starcross
15:22 29 May 24
Beth has been an excellent agent, great communicator and enthusiastic member of the team. Highly recommended!
Jess Pond
Jess Pond
13:16 29 May 24
Had an absolutely awful experience with this company. Told me one thing on the phone and then told me another thing on email. Very mixed messages. Left 7 students homeless by putting the house back on the market with only 24 hour notice. Will never use them again. AVOID!
Roisin Lilley
Roisin Lilley
11:42 24 May 24
I recently had some problems with my previous agent and came to Beth for help! She took over the correspondence for me and sorted everything out for me! I can’t thank her enough for her patience and help!! I’d highly recommend her to other landlords that need help!
Chris Lilley
Chris Lilley
11:26 24 May 24
I’ve been a tenant with Harringtons Lettings for a while, they are great, they always sort out any issues I have quickly and efficiently, Beth in particular is really helpful and I’ll be going to her for my next rental property when I look to move in September!
Georgina Palzeaird
Georgina Palzeaird
11:21 24 May 24
Beth Roberts was a huge help when I needed to switch to a new letting agency. She was friendly and efficient and I’ve always felt I’m in safe hands.
Eliya Halim
Eliya Halim
10:26 24 May 24
Top service
Maryana Atiya
Maryana Atiya
10:20 24 May 24
Rees Harper
Rees Harper
17:53 21 May 24
Lauryn Keller
Lauryn Keller
15:20 03 May 24
Georgie was great on our viewing - super lovely, informative and honest. Thank you!
Sammi Richmond
Sammi Richmond
09:16 24 Apr 24
Well, they just contacted me via email asking for a review for money... so here, I guess.Does 3 stars get me that tenner? Probably not. Nothing terrible to say, but never had any issues with the property really. Don't enjoy that they were willing to pay for reviews though, seems sketchy.UPDATE: As the business has finally replied to my review 6 years later, I thought I would mention that I indeed have the email still as proof. Offer of £10 for a review, and to mention Rachel Erridge in the review. Also a prize of £200 to one lucky winner. The email was sent from the Harrington's admin email address. I can email the proof to whoever requests it.
Jayden Charles-Frempong
Jayden Charles-Frempong
01:20 18 Apr 24
Every interaction I've had so far with Harrington has been positive with workers responding to calls very quickly and addressing any queries efficiently.
severin severinov
severin severinov
10:05 11 Apr 24
It is very good that they do their job professionally and take care of the customers.
kate quick
kate quick
13:15 09 Apr 24
I am very happy and extremely grateful to have found Harringtons lettings and the beautiful flat that I am now living in. Not only is the flat perfect for me, ticks all the boxes and is in a great location; the whole communication/admin process was so fast and efficient. I spoke to many of the team, but the two main contacts initially were Georgie and Beth. Great personalities, friendly and fast at replying to emails and phone calls. It was all turned around very quickly and everyone at Harringtons seems to appear to really be happy in their jobs. Great letting agent and I would recommend them to others looking for a new home.
Michael Hollamby
Michael Hollamby
12:32 09 Apr 24
Having worked with many many lettings it has been refreshing to deal with such a dynamic and energetic team. From start to finish the team have outstanding. Special mention to Beth who has been fantastic. I can thoroughly recommend using Harringtons.
Celyn James
Celyn James
17:08 27 Mar 24
Great experience, Georgie was so knowledgeable and kind with any enquiries I had. Really put me at ease while house hunting, amazing service thank you so much!!
Madison Harris
Madison Harris
14:29 27 Mar 24
Georgie was so helpful and really kind very appreciative x
Amber-Rose Cook
Amber-Rose Cook
08:58 22 Mar 24
easy to use and navigate as a first time user
Buffy Vaughn
Buffy Vaughn
18:06 21 Mar 24
Harringtons have been so helpful so far. Everyone we’ve spoken to on the phone including Georgie have been so warm and receptive and easy to communicate with. As a couple renting together for first time me & Danny couldn’t have found better people to help us out, they’re clear and concise. We discovered them through Rightmove and would highly recommend anyone to use their services to rent with.Thanks guys!Buffy & Danny
Sajan Raja
Sajan Raja
01:48 21 Mar 24
Kerryn Johnson
Kerryn Johnson
16:58 18 Mar 24
Georgie was absolutely amazing! Very helpful, easy to talk to and all in all an absolute sweetheart. Made the process of renting and finding a property less stressful. Always happy to help and lovely to chat to!Thank you again for everything!
Julia Reinstein
Julia Reinstein
11:22 18 Mar 24
5/5 - Everyone I’ve spoken to on the phone has been so friendly and patient with our move in documents. We found Harringtons through Rightmove, and have been really happy with our interactions. The team respond to queries efficiently and are happy to answer any and all questions.
Andrew Brown
Andrew Brown
07:09 15 Mar 24
A really excellent agency, who are very easy and friendly to deal with. Highly recommended.
Rob Rainbird
Rob Rainbird
18:04 13 Mar 24
Lovely staff and all round positive experience - Georgie is an absolute diamond and a credit to the team!
Tori Tor
Tori Tor
11:15 08 Mar 24
Harringtons have been really helpful and very swift with their responses. Georgie was very proffesional and really friendly when she did the viewings with me and Beth on the phone was again really helpful and gave me hope when I was explaining my eagerness to find somewhere new to live. Thanks Harringtons!
christos papanicolaou
christos papanicolaou
09:33 07 Mar 24
Staff were brilliant. Very helpful
Yasmin Bright
Yasmin Bright
20:54 01 Mar 24
I'm in a difficult situation at the moment with my landlord wanting to sell the flat that myself and my 3 children have been living in for 7 years. I came across Harringtons Viewings by applying to view some properties outside of my area.Unfortunately I haven't been able to sort anything with Harringtons, however I wanted to write this to say that they have been nothing but kind, warm and very understanding of my situation. I've been really impressed by their customer service (namely Georgie & Beth) and hope that they are able to find me something eventually!Thanks so much.Yasmin
Tegan
Tegan
17:30 22 Feb 24
Have been very accommodating and helpful when calling agents. They have been very helpful in being able to secure a house for students.
TheFlyingCrocodile
TheFlyingCrocodile
16:42 21 Feb 24
Went above and beyond to get things sorted for me
Brittany Stace
Brittany Stace
11:18 24 Jan 24
Harringtons have been incredibly helpful and supportive of us as new renters and they have been super efficient in getting all of the documents sent through and signed in such a short period of time. Thank you!
Georgie Prebble
Georgie Prebble
20:36 05 Jan 24
Jade Innes
Jade Innes
10:24 04 Jan 24
So far the service has been good. The staff are very friendly and quick to respond to any questions and requests.
Polly Smith
Polly Smith
11:17 28 Dec 23
we chose this letting agents as they chose a good bills company that is much cheaper than other agents. When viewing houses the staff were very friendly and have been very helpful in answering our questions and making the process as easy as possible.
Emma Howe
Emma Howe
16:06 14 Nov 23
I would rate Harringtons Lettings a 5/5. Very lovely on the phone and very quick and easy to communicate with via email. Any problems have been resolved in no time at all. So far so good!I found Harringtons via Rightmove.
Akwisitions Feedback
Akwisitions Feedback
16:25 30 Oct 23
Very responsive and super helpful throughout the process. Highly recommended!
Chloe Ballard
Chloe Ballard
17:28 02 Oct 23
Although I have only been renting with Harringtons for a short period of time, I have had nothing but a positive experience. From viewing to admin updates. The admin team especially are very polite and quick to respond and I have no doubt that the rest of my tenancy will run smoothly. I would recommend to anyone considering renting in brighton.
Matthew Ball
Matthew Ball
11:46 19 Sep 23
Professional communication with tenant although entirely impersonal. There was a bigger disconnect in their communication with the landlord in most cases, which seemed to be either slow or non-existent (discovered after contacting the landlord directly).Property was full of spider webs on day 1 despite apparently being professionally cleaned. Took a day off of work to clean it on move out day, leaving it cleaner than when it received but still had to pay part of the deposit for professional cleaning.It has been a while since I have rented, but I'll avoid letting agencies completely now if this is anything close to the average renting experience.
Ronan SK
Ronan SK
12:38 12 Sep 23
Great professionalism/communciation from the start up until the end of my tenancy. Definitely set the standards for what agencies should be like. Highly recommend to those within Brighton.
Daniel Sutton
Daniel Sutton
10:29 24 Aug 23
I have rented with Harringtons Lettings before and have always found the agents to be quick, efficient, friendly and helpful. I loved their service so much I have chosen to rent with Harringtons again. Faultless 😊
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