Tax expert issues 'serious risk' warning to students working in UK this summer

With summer approaching and many students looking forward to the end of term, attention might be turning to earning some money over the holiday months. But a tax expert is warning students planning on swelling their coffers over the summer to be careful, as they could be hit by tax obligations.

This is even more likely the case if you are an international student planning to work in the UK. Tax barrister Andy Wood has looked specifically at the working requirements and tax rules for international students working in the UK over the summer.

He said: "International students working in the UK should be mindful of taxation agreements between their home countries and the UK. While some agreements exempt certain people from UK tax liability, others require them to follow standard tax obligations.

"Cash-in-hand work for international students is a serious risk, from visa complications to legal penalties and tax liabilities. Working without proper documentation violates immigration laws and can lead to potential fines and taxes owed to HMRC.

“During term-time, students are typically allowed a maximum of 20 hours of work per week. This includes paid and unpaid work, and cannot be averaged over a longer period. While universities may impose stricter working limitations, students must stick to these guidelines to avoid potential visa violations.

"Those on a student visa are granted the opportunity to work full-time during official holiday periods, providing flexibility for employment opportunities, but students must make sure they are verifying term and holiday dates in line with their level of study and visa regulations. Certain types of income such as income earned abroad for essential expenses or sourced from scholarships/grants typically qualify for tax exemption for international students."

Tax rules for students

Andy added: "Understanding the tax rules can be confusing for students with part-time jobs. It's important to note that students do not need to pay tax until their earnings exceed the Income Tax and National Insurance threshold, which are £1,048 per month and £242 per week, respectively, which make up the Personal Allowance.

“Employers typically handle Income Tax and National Insurance deductions through the PAYE system, simplifying the process for students, but be sure to monitor earnings and stay compliant with tax obligations, especially if you’re working abroad during the holidays."