If you employ a student at any time other than their normal holiday periods, or if a student works for you both during and outside their holidays, you should operate the normal PAYE procedures used for any other employee.

If, however, you employ a student solely during their summer, winter or Easter vacations, you may be able to pay them without having to deduct PAYE. In most cases NICs will still have to be deducted.

From 6 April 2013, Form P38(S) will be withdrawn and students will be treated in the same way as all other employees for PAYE tax and NICs purposes regardless of when they work for you.

The processes described will be different after starting to send PAYE information in real time, so HMRC suggests that this might be a good time to familiarise yourself with any changes so that you are ready to operate PAYE in real time. Please contact us for guidance.


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