Student Finance

Do Students Pay Tax?

Ben Maples  · Dec 5th 2023

Student tax isn't as horrible or complicated as you might think, in fact, it's actually quite an easy thing to work out!


The ramifications involved with the breaking of tax laws can be incredibly serious; many people find themselves running afoul of tax. In fact, Chicago mobster Al Capone was arrested and eventually imprisoned for his tax situation. In the immortal words of Saul Goodman, “If they can get Capone, they can get you”.

We’ll have a look at a number of different scenarios here, such as do PhD students pay tax UK, do foreign students pay council tax, do students pay tax on earnings and do students have to pay council tax in a rented property?

Do students pay council tax during summer

Do students pay tax?

Yes; you will start paying taxes as soon as you are earning over the personal allowance figure that is representative in the UK at that point. Everyone in the UK will have to pay tax at some point in their lives.

The rates can change from year-to-year, with the rate depending on various socio-economic factors affecting the country at that time; however, at the moment, the minimum earning a wage to pay tax in the UK is £12,570 (as of 2021) – after that, you will enter a higher tax bracket. If you earn over the £12,570 bracket, you will have to pay a basic tax rate on everything you earn over that amount.

While working a part-time job while studying at university or if you decide on getting a job whilst doing your GCSEs, you will be in a different tax bracket, so you will likely not be taxed as you’re unlikely to come up to the required earning bracket.

Not all income is taxed.

What is a Tax rebate?

While the idea of having children is certainly up there, a tax rebate is, of course, the greatest a person can experience. Okay, that might be a bit of an overstatement, but it is certainly a welcome surprise for everyone!

A tax rebate is where the government reimburses the tax that you’ve overpaid, in the form of a cheque or online bank transfer. You will often see that you will get rebates once or twice every two years or so if you’re changing jobs, but overall, you will see a tax rebate every so often, depending on your job and your contributions. It’s best to keep an eye on your payslips and see if you are due one, but the government will let you know if you aren’t.

Do students pay council tax if they live at home

Do students pay council tax?

When it comes to student council tax, students are exempt from paying council tax as they are considered a “disregarded person” by the local government. This means that students don’t have to pay council tax under any circumstances, as long as they meet the criteria set out by the local council.

If students are exempt from paying council tax, which the majority of students are, and can provide proof that there is an exemption certificate etc, then they not even the landlord has to cover it for them.

You will still have to pay tax, even if you’re self-employed.

Is all income in the UK taxed?

Not all income is taxed. For instance, your wages, any state benefits you receive, some bank accounts and any Job Seeker’s Allowance that you happen to be claiming, will be taxed; however, your student finance package, any bursaries, grants, scholarships, Child Tax Credits or Disability Living Allowance or any ISA Allowances (see more below) that you have are non-taxable.

A useful tip for you is that when applying for any means-tested funds, like student finance, you only need to declare taxable income! Student income is taxable depending on the threshold.

Do students pay national insurance tax?

Yes, they do.

You can also claim back anything that you have overpaid as well.

To do this, you will need to keep an eye on your payslips, though. If you’ve noticed that you’ve been overcharged, then you will need to get in touch with Her Majesty’s Revenue and Customs and let them know or ask them to investigate. If you are entitled to money back, they will reimburse you as soon as possible.

Do PhD students pay tax

Do students have to pay student tax if they are self-employed?

You will still have to pay tax, even if you’re self-employed.

You can be entitled to pay less tax if you’re self-employed, but this is all dependent on a couple of factors for the business itself. Only profits can actually count towards your overall personal allowance.

Profits, are obviously worked out by the money that the business (or you) have earned and then take away the overall running costs of the business. Don’t try and be sneaky though, any money that you personally invest into your company is still very much your money. If you think that over-investing will help to save on tax, you’re wildly mistaken.

Obviously, if you are a student entrepreneur then you need to keep an eye on the tax rules of the UK anyway.

You will start paying taxes as soon as you are earning over the personal allowance figure that is representative in the UK at that point.

How much tax do international students pay?

Do international students pay council tax?

If any students have received any payments from a foreign country, then it is not taxable under UK law, as long as they are used for food, rent, bills or learning materials.

However, that being said, if foreign students are:

  • From a country with double-taxation agreements in place
  • Have other income that hasn’t come to the UK
  • Plan to live in the UK permanently
  • Spend on anything other than the aforementioned exemptions

Then you will need to pay tax in the UK.

What’s more, is that you won’t just pay tax in the UK, you’re also quite likely to pay tax in other countries too! You might want to do some research into any tax treaties first as well, just to make sure that you’re not paying tax twice.

Remember to keep an eye on things when you’re at university, don’t miss out on payslips, always read them and don’t allow yourself to be caught out on your tax, you don’t want to be the next Al Capone, or be ridiculed like Jimmy Carr!

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