Under certain circumstances students do need a UTR number.  Here we explore those circumstances, how a student can get one and the HMRC tax implications of a UTR number.

Do Students Pay Tax?

Yes, it is important to note that everyone who works is subject to the tax rules regardless of age. However, almost everyone is entitled to earn an amount without paying any tax, currently this is set at £11,500 for the current tax year but it changes each year.  This is called your Personal Allowance.

A tax year runs from 6 April to 5 April, so the tax year 2017/2018 runs from 6 April 2017 to 5 April 2018 and over the course of this year the first £11,500 (£958.33 per month) of earnings are tax free.

It is every individuals responsibility to report their earnings to HMRC or for your employer to report your earnings on your behalf, whether you need to pay tax or not.

What is a UTR Number?

UTR (Unique Taxpayer ReferenceNumber is a 10 digit number that HMRC issued to you when you registered for self employment.  This reference number is unique to you and means that HMRC can identify you, just like your passport number or national insurance number – for this reason it is really important you hold onto it.

What is Self Employment?

Self employment refers to a persons situation where they work for themselves rather than someone else.

When you are a self employed all the money you that you are paid is untaxed, unlike when you work for someone else and they pay you after deducting all your taxes and national insurance on your behalf.

When you are self employed you are responsible for letting HMRC know how much you have earned and how much tax you need to pay (much like an employer would do if you worked in a job).

You report your earnings on a Tax Return and it is really important to remember that you must complete this return regardless of how much you earn,  even if you earn below the threshold for paying any tax.



Are You a Self Employed Student?

Anyone can be self employed, including students.  HMRC provides some guidance to help you decide whether you are self employed or not.  Here are some of the questions to ask yourself to decide whether you are self employed:

  • run your business for yourself and take responsibility for its success or failure
  • have several customers at the same time
  • can decide how, where and when you do your work
  • can hire other people at your own expense to help you or to do the work for you
  • provide the main items of equipment to do your work
  • are responsible for finishing any unsatisfactory work in your own time
  • charge an agreed fixed price for your work
  • sell goods or services to make a profit (including through websites or apps)

How to Register as a Self Employed Student

You can register online as self employed here. The process can take 10 days to complete, upon which HMRC will post you a UTR number (Unique Taxpayers Reference). Keep this safe as you will need this code to file your Self Assessment Tax Return.

If you have already registered for Self Employment but have lost your UTR number, you can find out how to retrieve it here.

Related:

Cash in Hand Work: What You Need to Know

Do Students Pay Tax on their Christmas Jobs?

Students: Should You Pay Tax on Your Summer Job?

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.