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KS5 · Year 12 / Year 13 · Lesson plan

First job in your first tax year

A classroom-ready 50-minute KS5 lesson covering what really happens when 18-year-olds start their first job mid-tax-year: Starter Checklist, emergency tax codes, P45, the year-end refund mechanism via P60.

Key Stage
KS5
Year group
Year 12 / Year 13
Age range
16–18
Duration
50 minutes
Subject
PSHE / Economics / Citizenship
Cost
Free

Learning aim

Students can explain how PAYE works in a partial first tax year, recognise an emergency tax code, complete a Starter Checklist correctly, and know when and how to claim a year-end refund.

CURRICULUM National Curriculum links

RESOURCES What you'll need

LESSON Lesson structure (50 minutes)

Opening
HOOK
Ask: "You're 18, starting your first job in September. The tax year starts in April. How much income tax should you pay between September and the following April?" Take 3 answers. The likely answers will be wrong (most will say "about half a year's tax"). Spoiler: the answer depends heavily on your tax code, and many starters overpay.
Direct teach
TEACH
Explain the cumulative PAYE system: tax code 1257L = £12,570 Personal Allowance, divided across 12 months = ~£1,047/month tax-free. If you start mid-year, you accumulate UNUSED Personal Allowance from April-to-start. The system reconciles automatically IF your employer puts you on a cumulative code. But if you don't have a P45 (no prior employment), they'll put you on the Starter Checklist — and may use code 1257L Week 1 / Month 1 (W1/M1) which does NOT credit back-allowance.
Pupils apply
GUIDED
Calculate: an 18-year-old starts a £24,000/year job on 1 October 2026 (6 months into the tax year). With a cumulative code 1257L, by April they will have earned 6 × £2,000 = £12,000 — under the PA. Tax owed: £0. With code 1257L W1/M1: each month treated separately. Monthly PA = £1,047. Monthly pay £2,000 − £1,047 = £953 taxable × 20% = £190.60 tax per month. Over 6 months: £1,143. Difference: £1,143 of overpaid tax.
Stretch / depth
CHALLENGE
Discuss: who reconciles this? Three routes: (1) HMRC automatically recalculates after year-end (P800 letter, refund into bank). (2) The employee can claim mid-year if they leave. (3) Ignore it forever — HMRC may still send a refund, but not guaranteed. Best practice: complete Starter Checklist Statement A (this is your first job in the tax year) — that triggers HMRC to give you the right code immediately.
Close
PLENARY
Each pupil writes one piece of advice for an 18-year-old starting their first job mid-year. Share three. Land on: complete the Starter Checklist truthfully, watch for W1/M1 on your payslip, check your tax code on your P60 at year-end, claim refund if needed.

DIFFERENTIATION Adapting for all learners

Support (working below ARE)

Walk through the Starter Checklist box by box. Don't require independent tax-code calculation; show pre-computed figures. Focus on recognising "is this cumulative or W1/M1?" on a payslip.

Stretch (working above ARE)

Pupils research the difference between Statements A, B, and C on the Starter Checklist. They calculate the implication if a Year 13 student wrongly ticks Statement C (claiming they have other taxable income).

SEND SEND adaptations

For pupils with dyscalculia: focus on conceptual understanding rather than calculation. Use the visual analogy of "the box of monthly allowances" — full year = 12 monthly boxes; mid-year starter has 6 unused boxes that should be returned but only with the right tax code.

EAL EAL support

Vocabulary: "PAYE", "tax code", "Personal Allowance", "emergency code", "cumulative", "Starter Checklist", "P45", "P60". Provide a glossary card. Sentence frames: "My tax code is ___ because ___."

ASSESSMENT Assessment criteria

Pupils can: (1) name the Starter Checklist statements; (2) recognise an emergency W1/M1 code on a payslip; (3) calculate the tax difference between cumulative and W1/M1 codes for a mid-year starter; (4) explain how a refund is claimed.

HOME Homework pack

Three activities to consolidate PAYE mid-year starter mechanics. ~35 minutes.

Starter Checklist walk-through

What pupils do: Complete a (fictional) Starter Checklist for "Jamie, 18, starting their first ever job on 1 November 2026 earning £22,000/year." Mark which Statement (A/B/C) applies.

Expected output: Completed checklist with correct Statement.

Marking guidance: 5 marks — 2 for correct Statement A choice, 3 for accurate completion.

Code comparison

What pupils do: Calculate the income tax paid by November–March (5 months) for a £24,000 starter on (a) cumulative 1257L and (b) emergency 1257L W1/M1.

Expected output: 2 calculations with monthly breakdown.

Marking guidance: 6 marks — 3 per accurate calculation.

Refund process

What pupils do: Explain in 200 words how a UK taxpayer claims a tax refund after the end of the tax year. Mention P60, P800, and the gov.uk Personal Tax Account.

Expected output: 200-word explanation.

Marking guidance: 6 marks — 2 for each key element accurately described.

HOME Homework pack

Four activities to consolidate UK income tax mechanics. ~30 minutes.

Band calculation

What pupils do: For each gross salary, calculate the UK income tax (England/Wales/NI 2026/27 rates): (a) £15,000, (b) £30,000, (c) £55,000, (d) £85,000. Show the band split for each.

Expected output: 4 calculations with band-by-band working.

Marking guidance: 2 marks per accurate total (8 marks). Bonus 4 marks for correct band splits.

Personal Allowance research

What pupils do: What is the Personal Allowance? Why does it exist? Who loses it (the taper rule)?

Expected output: A 3-question short-answer response.

Marking guidance: 2 marks per accurate answer. 6 marks total.

Public spending

What pupils do: Find 5 different things UK income tax pays for. Order them by approximate share of government spending (biggest first).

Expected output: A ranked list of 5 spending categories.

Marking guidance: 1 mark per category, 1 mark per correct relative ranking. 8 marks total (e.g. NHS, pensions, education, defence, welfare).

Extension (optional)

What pupils do: Compare England, Scotland, and Wales income tax for someone earning £50,000. Which nation pays the most? Why?

Expected output: A 3-nation comparison table plus 2-sentence explanation.

Marking guidance: Up to 6 marks for accurate research and conclusion (Scotland pays more above ~£28k).

Family discussion prompt (safeguarding-aware)

Ask a working adult: "Name three things you think our tax money pays for." Compare their answers to what you learned in class.

SAFEGUARDING Classroom safeguarding

Note for teachers: Do not ask pupils about their own family's tax band, salary, or income. Frame all examples through fictional salaries. Be aware some pupils may be unsure of family financial circumstances — focus on the public-spending side of the lesson, not personal income.

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