Make sure you make the grade this summer, warns local tax specialist

 

Some 18,700 students are expected to look for temporary work in Wales this summer and following the clampdown on record keeping and launch of several campaigns focused on tax evasion by HMRC, a local tax specialist is warning local businesses not to skimp on the paperwork when employing students or face the consequences.

 

Roger Bowen, who runs TaxAssist Accountants in Llanelli, said; “Given the relatively short period employers have students working for them over the summer, it can be tempting to pay workers cash in hand to cut costs and avoid paperwork, but employers who don’t comply with employment law run the risk of both civil penalties and criminal convictions.

“Whilst taking care of paperwork can be time consuming, employing students can involve less paperwork.”

If a student’s income is under £102 per week, they do not need to be added to the payroll and therefore, no PAYE or National Insurance needs to be deducted. If they earn more than £102 per week but less than £136, then they should be added to the payroll; as they will need to be reported on the year end form P35- but no deductions will be triggered.

Once they earn more than £136 per week, National Insurance starts to kick in and in the unlikely event they earn more than the Personal Allowance (currently £7,475 per annum) or work during term-time, normal payroll procedures will apply.

Employers taking on full-time students during the holidays are required to provide them with a P38(S) Student Employees form, which can be obtained from HMRC.

But there are other considerations to take into account Roger warns; “employers need to be aware that students are only permitted to work a maximum number of hours per day and week and that there are National Minimum Wage limits to comply with.”

TaxAssist Accountants Llanelli is a local business, operating across Carmarthen, Llanelli and Swansea, providing tax and accountancy advice and services purely to small businesses.