Student Employment
There will no longer be a concept of ordinary residence. For many individuals their tax status will not change but going forward for many people it will be much clearer what their status is, although as ever there will be some grey areas where individuals fall into two camps. Extra Statutory Concessions A11 and A78, that allow tax years to be split, became obsolete from April 2013 when Schedule 45, FA2013 replaced them. Overseas Workday Relief (OWR) excludes earnings for overseas work from UK tax for non-UK domiciled individuals who are resident in the UK for less than three years provided the earnings are not remitted to the UK. Individuals claiming OWR under the old rules for 2012/13 will continue to use these old rules rather than adopt the new ones which came into force from April 2013. COPYRIGHT © 2021 THE CHARTERED INSTITUTE OF PAYROLL PROFESSIONALS From April 2017 the concept of permanent “non-domiciled” status ended and was replaced with a new test to establish whether a taxpayer is liable to UK taxes or not. Where a person has been resident in the UK for 15 years out of the previous 20 they will be considered domiciled in the UK for tax purposes. STUDENT EMPLOYMENT Until the 6th April 2013 the PAYE treatment of students undertaking short-term work during vacations was different in some respects from that of other employees provided certain conditions applied. Employers who did not wish to operate the tax exemption as they felt it too burdensome could simply subject students to the normal P45/P46 process. Tax There was no liability (even where the student’s pay in a pay period exceeded the Earnings Threshold) provided the required declaration was completed and signed. NICs There is still no liability, for either employee or employer, if the payment is made before the student reaches the age of 16 years; after age 16 NICs is deducted in the normal way. From 1st October 2006 SSP has been payable to under 16s so NI’able pay must not be used to assess SSP entitlement. Hours of work Employment of students is subject to restrictions relating to the number of hours and/or days worked; for children of school age, the type of work undertaken is regulated locally by individual local authority bylaws – see https://www.gov.uk/government/uploads/system/uploads/ attachment_data/file/193326/Child_employment09.pdf. No printing, copying or reproduction permitted. Foreign students Foreign national students may well be given permission to enter the UK to study but may have restrictions placed on their ability to take paid work, employers should check carefully the terms shown on their Biometric Residence Permit.
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