However, from 6th April 2013 students will be treated in the same way as all other employees for PAYE tax and NICs purposes, regardless of when and how long they work for you.
The P38 (S) form currently enables employers to take on students during holiday periods and not deduct tax. From April 2013 the rules are changing and this form will be withdrawn.
Christina Nawrocki from Wellers Accountants said: “For an industry that employs such a high number of students, this new legislation is likely to affect a lot of employers.
“It’s worth familiarising yourself with the changes now and calculating the impact it may have on your business so you can review your recruitment plans effectively.
“For students the new system will make things more complicated as they will pay PAYE tax at source. If they find at the end of the tax year their total income for the year is below the annual personal allowance (currently £8,105) they will have to contact the tax office directly and seek a repayment.”
Visit www.wellersaccountants.co.uk for more advice and information.