Students who do holiday work will have income tax and national insurance deducted from their wages for holiday work from next April when the government scraps a student opt out for Pay As You Earn (PAYE).
From 6 April 2013, employers must treat students in the same way as all other employees for income tax and national insurance contributions (NICs) purposes.
Currently, employers who employ a student solely during their summer, winter or Easter holidays may be able to pay them without having to deduct PAYE tax. In most instances, however, NICs will still have to be deducted. But with the advent of real time information (RTI) the paper P38(S) form that must be completed to get this treatment will be retired from 6 April 2013.
The P38(S) form was designed to help stude...