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How to complete your student tax return – Our step-by-step guide

October 26, 2021by The PAYE People

It’s never too early to start thinking about your tax returns. As a student, it is the single most important move that will set your future on the right path. If you have a source of income, sending tax to the Her Majesty Revenue and Customs (HMRC) each year is the way to go. Here’s our guide on whether students pay tax or not in case you are unsure if you should or not. Unfortunately, many people are not sure how to go about completing student tax returns. If you’re on the same page and looking for guidance on how to about it, we’ve got you covered.

Our student tax return step-by-step guide will walk you through and help you stay on the right track to file your taxes. Remember to keep your notes and calculations to estimate what your return will be like to avoid mistakes. The process often involves filling in the fields and submitting whatever you’ve filled. What follows is waiting for a response as soon as possible.

How should you pay income tax?

There are two ways you may pay your income tax as a student:

The PAYE system is where a person’s tax is collected at the start of the year based on their income in the previous year. If you were a student in the previous year and didn’t have a full-time job, the person may qualify for a repayment plan if they have a part-time or graduate level job in the following year. Often, employers are taxed to deduct the taxes from salaries and submit them on behalf of their employees.

Self-assessment is the next option you have if you are getting money from different sources other than a salary. This option is great for self-employed individuals, sole proprietors, business partners, or if you get additional revenue elsewhere.

When filling in your Self-assessment tax return, you’ll need to tell HMRC the source of your income. You’ll also need to provide your National Insurance number as well as your date of birth. Once you’ve filled in this information, you’ll need to fill in your personal details, your employment details, your savings, and your expenditure.

A university student in a library, taking notes whilst researching on her laptop.

What information will I need to fill in a student tax return?

Some of the information you will need to provide include:

  • Unique taxpayer reference (UTR)
  • Records of expenses you could be getting from business
  • Your national insurance number
  • Those records indicate how much of your income was taxed in the past
  • Contributions to charities or pensions that might qualify for tax relief
  • The P60 or another record showing how much income you have already paid taxes on

Beware of self-assessment deadlines

It may seem intimidating, but filing your tax return on time is really not that difficult. It may take a lot of time and work, but it’s worth the effort. There are deadlines all year round for filing self-assessment returns, so it’s important to learn how to fill out the form at the right time. It may take a long time if you’re doing it by hand, but there are plenty of free tax filing services available at the click of a button. Some of the deadlines you need to meet include:

  • By 5 October 2021 if it’s your first time to submit a self-assessment return
  • By midnight 31 October 2021 if you are filing a paper tax return
  • By midnight 31 January 2022 if you are filing your returns online
  • By midnight 31 January 2022 if you are paying the tax you owe

If you file your taxes on time, you (hopefully) only get charged a filing fee and nothing else. However, it’s worth knowing that you do get charged a penalty fee and interest on late payments. So, if you’re about to file, get your paperwork together on time to avoid the penalties and interest charges. The penalties and interest fees may end up making the costs unmanageable. You don’t want to be the victim in such situations.

A man in a library researching by reading books for his university project,.

How to file HMRC tax return, step by step

As mentioned earlier, you might need to file a tax return for a number of reasons. For example, if you’re self-employed and didn’t submit your tax return on your own – you’ll need to submit your annual return and pay tax on the profits you made.

Register for self-assessment tax return first

The first thing you should do when you prepare your self-assessment tax return is to register for Self-Assessment Tax Return. Re-registration is also required if you did not file for the previous year’s return even if you’ve done it before.

Every registration comes with a Unique Taxpayer Reference (UTR) together with an account for self-assessment where you’ll complete and pay your tax return. You will get a code via post within a week and a half (three weeks if you are outside the UK). It’s this code that you’ll use to activate your online account. You have to do it within four weeks after receiving the code.

Take note that the deadline to register your account comes earlier than the deadline for completing the tax return.

Submit your tax return online or by post

Submitting tax returns starts with gathering all the needed information. Having the relevant information is what enables you to complete your tax return. You need a Unique Taxpayer Reference, your National Insurance Number, and your bank statements. Your bank statements should include the income and interest statements from your savings.

Even after using these documents, ensure you keep them well. You may need to keep some of these documents for up to six years at the request of the HMRC. Often, most of these documents you’ll keep for three years. If you fail to keep these documents when they are needed, you might end up paying hefty fines.

If you are completing your tax returns in paper forms, ensure you send them over to the HMRC on time. Filing out your returns online is the best option because you don’t have to visit offices, lose your files, or wait too long.

The filing form will have a lot of spaces that require you to fill. This might seem overwhelming but the good news is that you only need to fill the gaps that are relevant to you. Online options have automation that may fill some parts for you and remove other parts that are not relevant to your situation. If you feel lost, find the reading resources on the HMRC website for clarifications.

A person reviewing their income taxes in preparation for sorting their student tax return.

Pay your income tax to HMRC

When you declare your income in the self-assessment form, the HMRC calculates how much tax you owe. This greatly depends on the income tax band or category you are in. It’s at this stage that most people are keen and attentive. When the HMRC deducts a lump sum of your money from your account, the feeling may be aching but worth it. You don’t want the government chasing you around because you didn’t pay your taxes in future.

Some individuals have a budget payment plan to help them pay their taxes. Others save up throughout the year for the purpose of making tax payments and find it an easier option. You can choose what works for you.

There are several methods you could use to make your payments. Keep in mind that some of these methods take longer than others. Make sure you have an idea of how long your preferred method will take. Consider the dates and deadlines and avoid as much as possible failure to pay your taxes.

A summary on how to complete your student tax return

The student tax return is a great opportunity to start taking control of your future. Make sure you think about the things we have talked about above when completing your return. There are many ways to file your returns depending on your source of income. You choose the best way that works for your situation and provide the required information. Don’t forget to keep your documents safe even after filing your taxes because you may need them in future. If you’ve done all of this you’ll be well on your way to the perfect student tax return.

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