Students disadvantaged
The P38S form is used to ensure that students don’t pay more tax than they have to on holiday jobs, and it’s been a blessing for many. Unfortunately as part of the move towards RTI, P38S will be withdrawn from 6 April 2013. After that, students will be treated just like any other employees.
Form P38S has always been voluntary for employers, but its withdrawal will disadvantage many students who earn less than their personal allowance during the tax year. From April 2013 they will have tax and NICs deducted from their wages. Such students will be able to use form P50 to reclaim tax deducted within the tax year, but many students (and employers) are unaware of form P50.