When you're working all summer just to try to earn a dollar

Cure the summertime blues by sorting out your tax, and profit from the college vacations.
Summer vacations mean lazy days for most of us at work, but for many students it is an opportunity to reduce overdrafts and indulge in some travel. If the two can be combined so much the better. But sensible students should keep an eye on the tax-man. Student grants, scholarships and most research awards are not taxable but student earnings from full- or part-time work, including tips and bonuses, are.

However, tax does not have to be paid on all taxable income. Everyone is entitled to a personal allowance which is currently pounds 3,765 and no tax will be payable on income less than this during the tax year which runs from 6 April to 5 April.

National insurance contributions will, however, be payable on earnings unless they fall below pounds 60.99 per week. The rate at which national insurance is levied will vary between 2 and 10 per cent depending on how much the employee is earning, and all students should, once they reach the age of 16, receive a NI number card from the Department of Social Security.

Those doing holiday jobs who believe that their total taxable income over the tax-year will be less than the personal allowance should mention this to their employer when they start work. The employer should be asked to provide a Form 38(S) which should be completed, signed and returned by the employee.

Once the form is completed the employer can pay the employee without deducting tax. If tax has been deducted before Form 38(S) has been completed, the employer will refund this tax.

If the total income earned exceeds the personal allowance that surplus will be taxed at source under the PAYE system in the usual way. The welcome news, since 6 April, is that tax is levied at only 20 per cent on up to the first pounds 3,900 of taxable income. Tax is then levied at 24 per cent on all income between pounds 3,901 and pounds 25,500.

Students who have worked before or have been able to claim unemployment benefit should hand their form P45 to the new employer. This form sets out the PAYE code, the total earnings and the tax paid to date by the employee.

Many students like the idea of working abroad. They will usually be liable for local taxes, but there are no work permit restrictions on UK nationals working anywhere in the European Economic Area. This area includes the 15 member states of the European Union as well as Norway and Iceland. In certain cases, employees who stay for longer periods may have to register with the police, but the main problem in Europe is finding a job.

British nationals may also apply to the Australian High Commission for a working holiday visa if they are between the ages of 18 and 25. In certain circumstances this concession can be extended to those up to the age of 30. Those in the latter category must show, inter alia, that the prime purpose is a holiday in Australia, that they have a return ticket and reasonable funds to support themselves. In addition, employment with any one employer should not exceed three months.

British nationals between the ages of 18 and 30 who want to work in New Zealand can take advantage of the UK Citizens Working Holiday Scheme. This entitles up to 500 UK nationals to spend up to 12 months in New Zealand on a working holiday.

Applicants must show that they have a return air ticket and a minimum level of funds for living expenses. Applications should be made to the New Zealand Immigration Service in London.

UK nationals can now enter the United States for up to three months without a visa. However, those who enter on their tourist visa are not allowed to undertake any form of employment. Those wishing to work temporarily in the United States must obtain a non-immigrant visa. These documents must be applied for and granted before entry.

For many students wishing to work in the United States, the best route is through BUNAC. This organization helps its members obtain employment and work permits. Details can be obtained from the organization's London office or from the organization's representatives at most universities and colleges of higher education.

There are other programmes such as Camp America which take on youth leaders to work in American summer camps during the summer months. Successful applicants will receive a return flight, board and lodgings, as well as some pocket money.

Discounted travel is available to young travellers. For those travelling in Europe, the Inter-Rail card is one of the most popular documents. The card, at a cost of pounds 275, gives the holder unlimited travel for one month round western Europe as well as much of eastern Europe. There are also discounts available on rail travel in the United Kingdom.

Discounts on flights as well as coach and rail journeys are available to holders of the International Student Identity Card, which can be obtained from most student travel offices.

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