Students and form P38(S)

The procedures for the use of form P38(S) are changing from 6 April 2004. The changes are:

• The student's declaration "I have no income from teaching or coaching, and no employment except during holidays" has been changed to "I have no employment except during holidays". If the student has income from teaching or coaching during term time, the student cannot sign the form.
  
  
• The form now makes it clear that the employer must start to deduct tax if the student's pay exceeds £;4,745. If that happens, the employer must deduct tax using tax code 0T on a W1/M1 basis. Tax is therefore due in full on all earnings over £;4,745.
  
  
• If the student's earnings have exceeded the NICs lower earnings limit in any earnings period during the tax year, a P14 summary must be submitted and the figures included on the P35 annual return.
  
  
• At the year-end, the employer completes the Employer's statement but no longer sends the form to the employer's Inland Revenue office. It is retained, instead, with the employer's payroll records for at least three years following the year to which it applies, or longer if the employer is asked to do so.

Note that these rules, prompted by the move to electronic filing from the 2004/05 tax year, do not apply for the 2003/04 tax year end.
...back to 12 March 2004

P38(S) student employees

Students working only during their holidays are required to declare on form P38(S) that "I have no income from teaching or coaching, and no employment except during holidays". This gives the impression that any income received from teaching or coaching at any time, including during term vacations, would disbar the student from signing the declaration.

The Inland Revenue has issued the following clarification:

"Form P38(S) should be used only where the students' sole source of income is during recognised vacation periods (holidays). The source can be from teaching, coaching, employment, but must only be during these recognised vacation periods… Provided the teaching and coaching is only during the holidays, then the student may complete the form P38(S) - providing the other conditions, regarding returning to full time education and income level, are satisfied."
...back to 18 July 2003