Thursday, December 9, 2010

Gap year money 'safe from the taxman at Christmas'

Britain's students could bag themselves an extra-special Christmas present this year – the opportunity to earn tax-free gap year money.

HM Revenue & Customs (HMRC) has reminded those saving their pennies for a gap year abroad that they can earn wages without paying tax, provided they stay within the limits and complete all necessary paperwork.

In a recent message, HMRC told students, who may be looking for temporary work once the end-of-term holiday begins, that as long as their total earnings for the year do not exceed £6,475, they will not have to pay tax.

Students taking on work when the university shuts its doors for Christmas should complete form P38(S) so that their employer does not take tax off their earnings before they are received.

However, anyone who fails to fill in the form and ends up unduly paying tax as a result can claim their gap year money back afterwards, by submitting a P50 form.

Click here for more gap year information