Students: Income Tax
The question
To ask the Chancellor of the Exchequer, whether she has made an assessment of trends in the level of students not reclaiming overpaid income tax.
Answered by James Murray
The amount of income tax a student pays depends upon their total taxable income, including employment income. The standard income tax personal allowance for the 2025 to 2026 tax year is £12,570, which means that most students do not pay tax on the first £12,570 of their total taxable income.
HM Revenue and Customs (HMRC) does not hold data in its income tax accounting systems that identifies students.
Students pay income tax through the PAYE system or through a Self Assessment tax return. After the end of the tax year, HMRC carry out an end of year reconciliation on all customers in PAYE in order to identify any overpayments or underpayments. Where tax has been overpaid, this will be automatically repaid to individuals, including students.
For individuals, including students, who submit a Self Assessment tax return, HMRC will process the return and any overpaid tax will automatically be repaid to the individual. Where an individual files their Self Assessment return online, they can request a repayment through their HMRC online account.
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