stakeholders and make a more formal announcement in due course. However in the meantime employers participating in the Real Time Information pilot will not be able to use form P38(S) when employing a student during the vacation. If the employer knows that they will be going on to RTI whilst employing a student they will not be able to use form P38(S) and should treat that student the same as any other employee. This is how employers will be affected during the 2012/13 tax year: April 2012 - Controlled Go-Live employers - These employers should not use the P38(S) process and treat students in the same way as any other employee May - June 2012 - joining employers are unlikely to be impacted unless they have employed students during the Easter break and have used form P38(S), they will follow the process outlined below July - September 2012- joining employers should not use form P38(S) for students working for them during the summer vacation but will need to follow the process outlined below if they used form P38(S) November, December 2012 & March 2013 - these employers can use form P38(S) over the summer holidays if they want to and employers joining RTI in March 2013 can also offer it over the Xmas holiday, if they do they will need to follow process outlined below If an employer has used the P38(S) process for any student employees for 2012-13, they must include details in the payroll alignment process when they move to Real Time Information. They will need to show the student employee as a leaver when reporting the pay they received during holiday time by entering:
the tax code 'NT' the last date of payment as the date of leaving
If a student subsequently returns to the employer during another holiday period they will be treated in exactly the same as any other new employee starting employment.
P38(S) Guidance updated
20 July 2012
We reported in News back in March that HMRC had made an informal announcement regarding the decision to withdraw student form P38(S). HMRC has now changed the guidance on their website to reflect the changes. P38(S) process for students before joining Real Time Information (RTI) If, prior to joining RTI, you have been employing a student during holiday time only and expected their income to be below the personal allowance (£8,105 for the tax year 2012-13), you may have been using the P38(S) procedure to pay them without deducting tax. This was a voluntary system and the decision whether to use it was yours as an employer.
When you operate PAYE under RTI, the P38(S) process is no longer available.
If you have used the P38(S) process for any student employees for 2012-13, you must include details in the payroll alignment process when you move to RTI. You must show the student employee as a leaver when reporting the pay they received during holiday time by entering:
the tax code 'NT' the last date of payment as the date of leaving
If a student subsequently comes back to work for you during another holiday period you must treat them in exactly the same as any other new employee starting employment with you.
CIPP Policy News Journal
12/04/2013, Page 164 of 362
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