The recession has made a gap year more appealing than ever, and not just for prospective students, says Kirsty Cameron in The Daily Telegraph. But if your finances are tight, don’t make things worse by failing to claim any tax refund you may be due.
Anyone under 65 is allowed to earn up to £6,475 before paying tax; for older people the tax-free personal allowance rises to £9,490. Therefore, it’s quite likely that any ‘gappers’ who have only worked for part of the tax year before setting off on their travels may still have a large amount of their personal tax allowance available.
So as long as you don’t expect to work again in the tax year, you should reclaim any overpaid tax by using form P50. And students who are in full-time education should be aware that they can avoid paying any tax in the first place.
According to Taxfix.co.uk, as long as students “are working only in the holidays and are earning less than their tax-free personal allowance, they should complete form P38(S) with their employer, which means they will be paid their salary gross of tax”.