If you're staring down the barrel of your first job after school or university, the taxman can seem like a bit of a monster. You might also have student loans to start paying off. That alone can look like a steep climb when you're standing at the foot of the debt-mountain you've somehow piled up. Don't panic, though. It's not as terrifying as it seems, and there's lots we can do to help. Here's what you need to know to get you started in your first job.

Your tax code and personal allowance

For most people, paying tax is actually as simple as getting paid. The Pay As You Earn (PAYE) system means that the paperwork's pretty much all taken care of by your employer. You'll get a tax code and a Personal Allowance, which is the amount you can earn before you start paying tax.

Self Assessment and Self Employment

Depending on the work you're doing, though, you might have to sort out your own taxes. That means getting to know the Self Assessment system. Under Self Assessment, you have to file a tax return to declare your income to HMRC. They'll then let you know how much you owe in Income Tax and National Insurance.

There are strict deadlines to hit, and some nasty penalties if you miss them. On the other hand, you can do a lot bring down the tax you owe, making up for your essential work expenses. You'll want to mark the 31st of January and the 31st of July on your calendar for a start. Those are the final dates for filing your tax returns (and paying what you owe on them) and making your “payments on account”, respectively.  Self Assessment is a huge subject, but RIFT has you covered. We have a specialist team to handle the whole thing for you, from registering for the system to filing your paperwork.

Employment (PAYE) and tax refunds

If you work PAYE, you can easily find yourself paying too much tax. A major reason for that is travel to temporary workplaces. To be clear, a normal commute to work doesn't earn you a tax refund. However, if your workplace counts as “temporary”, you can claim back tax on several kinds of expenses. Mileage, food, accommodation and even laundry can count toward the tax refund you're owed. Again, this is a huge and complicated subject, so get in touch with RIFT to find out where you stand.

Student loan repayments

As for that mountain we mentioned, there are some key thing to know about your student loan repayments. If you're just now starting work for the first time after being a student, you'll have what's called an Income Contingent Loan. Depending on which version you've got (Plan 1, Plan 2 or even both), you'll have an income threshold to hit before you start having to pay it back. The Plan 2 threshold, for instance, is set at £21,000. That means if you're making under £1,750 a month, you wont be making repayments.

Once you start earning enough to make repayments, you'll be dealing with the taxman again. Student loans are taken care of through the tax system, whether through PAYE or Self Assessment. By the way - if you're on Self Assessment, don't forget to mention your student loan in your tax return. There are penalties for giving the wrong information, and they're not fun.

The amount you'll pay is calculated at 9% of the money you make over the threshold each month.


Let's assume you're on Plan 2 (threshold of £21,000) and make £25,000 a year. That's £4,000 over the threshold, meaning you'll pay 9% of that each year.

That works out as £360 a year, or £30 a month.

Again, if you're on PAYE, this will be taken out of your pay before you get it.

Paying your student loan off more quickly:

You can actually pay off your loan more quickly if you want. You can make one-off payments of £5 or more directly to the Student Loans Company at any time. Sadly, that doesn't change the amount you have to pay each month through the tax system. It does mean you'll get it all paid off sooner, though.

Get help from RIFT

Getting your head around the tax system can be daunting if you're not used to it. A lot of people get tripped up by it, and even more end up paying more than they owe.

If you've got questions or concerns about HMRC, talk to RIFT. We're the UK's leading tax experts, and specialise in making sure people only ever pay what they're supposed to.

If you're owed a refund, we'll let you know and help you claim it back. If you're struggling with Self Assessment, we can take care of that for you too.

Whatever tax questions or problems you've got, we've got answers and solutions. Just phone, email, use our LiveChat or send us a message on Facebook to get started.