P38(S) to be abolished
Currently legislation states that those of your employees that are students and on courses in the United Kingdom and working for you solely in the holidays i.e. Summer, Christmas and Easter, can complete the student declaration form P38(s) and possibly receive their pay without Income Tax being deducted.
However, under the new PAYE regime based on Real Time Information the form P38(s) will no longer be available to students . For the time being the existing PAYE rules will still apply to students who are employed by those employers that are not part of the Real Time Information scheme.
It is likely that the P38(s) will be completely obsolete in the year 2013-14 as that is when all employers will be using RTI.
At the time of going live with RTI, whether it is in the pilot phase, volunteer phase or April 2013, Employers need to ensure that any student employees on the payroll are treated as leavers, with a leave date (last date of payment as leave date) and tax code NT applied. If the P38(s) and corresponding NI tax code have been used in the past, it will not be available from the start of the tax year 2013-14.