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HMRC internal manual

PAYE Manual

Employer returns: employer return post capture: form P38(S)

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When is a form P38(S) appropriate?

From 6 April 2013, form P38(S) is withdrawn and students will be treated in the same way as all other employees for PAYE tax and NIC’s purposes regardless of when they work for an employer. Employers already within RTI have dealt with students this way since joining RTI.

The details below relate to non RTI schemes prior to 6 April 2013.

Where an employer employs a student who will return to full time education at the end of a period of vacation special procedures may apply instead of the employer operating PAYE. When an employer employs students in this manner a form P38(S) should be completed providing

  • The student will continue to be in full time education until after 5 April next
  • Have no income from teaching or coaching
  • Have no other employment except during holidays
  • Their total earnings for the year ended 5 April will not be more than the basic personal allowance. This includes

    • Jobseeker’s Allowance paid because of unemployment


    • Other income from all sources apart from scholarships and educational grants


1. If the student is unable to complete the form P38(S) as they do not qualify the employer must operate PAYE in the normal way.
2. Where a student’s earnings is at or above the Lower Earnings Limit (LEL) NIC should be deducted in the normal way.

Form P38(S) requirements

A form P38(S) requires the student and the employer to complete certain information on the form. The student can only complete the form if they qualify to complete the student declaration (none of the exclusions apply).

If eligible, the form requires the student to provide the following details

  • Their full name
  • The school, college or educational body they attend
  • Their NINO
  • Their date of birth
  • Their home address
  • Their signature
  • Date form completed

The form also requires the employer to declare that the student’s declaration was completed by the student and requests the employer to provide

  • The period the student was employed by the employer
  • The student’s total pay during that period
  • The employer’s name and address
  • The employer reference
  • Date form completed

Note: A fresh form must be completed for each tax year a student is employed by an employer. This will mean that two forms P38(S) must be completed where the period of employment straddles two tax years. For example employment during an Easter holiday.

Retention of forms P38(S)

From the 2004-05 tax year employers will be asked to retain all completed forms P38(S) for at least 3 years after the end of the year to which they relate, or longer if they are asked to do so.

These forms must be made available for inspection by HMRC if required, but there is no longer a requirement to submit forms P38(S) with the end of year return.

Foreign students

An employer should not accept a form P38(S) from a foreign student unless it has been stamped by an authorised sponsor. The following table provides details of the organisations that have been authorised to sponsor foreign students to work in the UK.

Educational Sponsors  
BUNAC British Universities North America Clubs
CFS / AOSC Canadian Federation of Students / Association of Students Councils (Canada)
EURO EMPLOY Wellingborough Northants
IAESTE International Association for the Exchange of Students for Technical Experience
LEICESTER TWIN City of Leicester Twinning Association
Farming Sponsors  
HAYGROVE LTD Redbank, Ledbury
G’s MARKETING LTD Ely, Cambridge
HOPS Labour Solutions Harvesting Permit Scheme
FRIDAY BRIDGE (International Farm Camp) Wisbech
R & JM PLACE Ltd Church Farm
S & A PRODUCE Hereford
SASTAK LTD Craven Arms
WILKIN & SONS Ltd Tiptree

Note: There are other student exchange bodies which provide work with particular UK employers. You should contact IMS (Employer Unit) Shipley for guidance if

  • A sponsoring body asks to relax requirements for PAYE operation for students


  • You have questions regarding the issue of form P38(S) by a sponsoring body