This section is only for you if you are:
- not working in term time and
- do not intend to work at all in term time
but
- you work in your vacations
and
- you do not expect your total income, that is, all your taxable income added together, not just your earnings) to be more than your personal allowance in the tax year which is £7,475 for 2011/12.
If all of the above apply, you might be able to use the P38(S) system so you can be paid without having tax deducted from the wages you earn during the vacations. In any other situation, for example if you have worked or are planning to work at all in term time within the same tax year, you should instead read the section on term time employment because the P38(S) will not apply.
Foreign students working in the vacations
Students from abroad are only able to use the P38(S) system in limited circumstances. These are described on the HMRC website. Basically, if you are a European Union national, you may use the form, but students from elsewhere can only do so where they have an authorised sponsor, of which there are very few.
The P38(S)
If, following on from the above, you are comfortable that you might be able to use the P38(S) system you now have to ask your employer if you can fill in form P38(S). The form is not mandatory and your employer does not have to let you use it.
The P38(S) is a short form that you complete, sign and give back to your employer. It authorises your employer to pay your wages free of tax, but not National Insurance contributions (NICs).
If your employer has deducted any tax, say before you returned the completed form P38(S), they will refund it.
If your period of work straddles the start of the new tax year on 6 April, you will need to consider your position for each tax year separately and complete a P38(S) for each year.
If you have completed a form P38(S) you will not receive form P45 when your vacation works ends. If you take up another job later in the tax year where the P38(S) does not apply, for example term time work, or perhaps starting a full time job if you have finished or left your course, you will need to tick box B on the P46. You will then have to contact HMRC to tell them how much you earned under the P38(S) system so that they can take this into account and adjust your tax code for the new job.
National Insurance contributions (NICs) and the P38(S)
Your employer still has to deduct NICs from your pay in the same way that they would for any other employee because the P38(S) only allows you to be paid without tax deductions. The P38(S) does not affect the deductions of NICs.
