Income Tax And National Insurance Contributions

There is useful information for those starting out in self-employment on GOV.UK.  

GOV.UK has useful information about employment and about money and tax.

Tax Guide for Students

The website Tax Guide for Students offers guidance to help you navigate through the complexities of tax. The website covers areas such as:

  • Tax essentials
  • Working
  • Volunteering and training
  • Tax credits and benefits
  • Tax refunds
  • Types of student
  • Going abroad
  • Other income
  • Student loans

Factsheets are available for download; included are podcasts and templates to help with tax questions and queries to Her Majesty's Revenue and Customs (HMRC).

Tax and National Insurance Contributions

If you are earning more than the Personal Allowance, you will need to pay income tax on income from work (including full-time, part-time and temporary jobs) and any profits you make if you are self-employed.

You pay National Insurance contributions to build up your entitlement to certain state benefits, including the State Pension. The exact amount you pay depends on how much you earn and whether you are employed or self-employed.

If you are employed
Your employer will take your tax and National Insurance contribution directly from your pay and send it to the government through a process called Pay as You Earn (PAYE). You should receive a payslip that shows how much you have been paid and how much has been taken out for tax and National Insurance.

If you are self-employed
As soon as you become self-employed you must register for Income Tax and National Insurance purposes with HM Revenue & Customs (HMRC). If you delay registering, you may have to pay an initial penalty. See the working for yourself pages on GOV.UK

If you are unsure whether your work makes you self-employed, there is information to help you decide your employment status on GOV.UK

If you are self-employed, you normally have to pay Class 2 National Insurance contributions. If your annual profits are over a certain amount you also pay Class 4 contributions. In certain circumstances you may be exempt from paying. Find out more about Class 2 and Class 4 National Insurance contributions on GOV.UK.

International Students

If you are an international student and wish to work, you can read more about working in the UK, including applying for a National Insurance number.

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