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In the October 2007 edition of the Bulletin we told readers about Dispensations and PAYE Settlement Agreements (PSAs). We would just like to clarify that a PSA must be entered into before 6 July following the end of the tax year to which it relates. The last date an application would be effective is 5 July.

In the February 2008 edition of the Employer Bulletin we answered questions about the tax treatment of student employees.

The answer to one of the questions was incorrect. The correct position is as follows:

What do I do where a student who works in the holiday under P38(S) procedures leaves and returns during term time?

If the student has worked in the holidays under the P38(S) procedures and then, after a break, takes a new job with the same employer in term-time, he/she should complete form P46 with a tick against Statement B to reflect that he/she has worked previously in the tax year.

Emergency tax code would apply on a week 1 basis.

Where Statement C is completed tax code BR cumulative should be used in line with PAYE Regulations 49(2), on earnings 'in this employment' only. In all cases 'the tax code used' field should be completed.

At the year end it would be helpful if the employer could make a P14 report in respect of both periods of employment - ie, two P14s - one for each job.