Payments to Students, Visiting Academics, and Volunteers

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A number of different types of payments may be made to students. This guidance applies equally to both UK and foreign students.

1. Reimbursement of expenses 
Where relevant, e.g. on a travel grant, students may be reimbursed the actual costs of travel, subsistence and other expenses incurred via the Expenses process, subject to the requirements of the policy. 
 

2. Payment for services
As with any engagement, an assessment should be undertaken as to whether the work should be treated as employment. If so, the student should be paid via payroll and treated in the same way for tax and National Insurance purposes as they are any other employee. In some cases, if the student is self-employed, it may be appropriate to pay via an invoice.
 

3. Scholarships
Scholarships may be referred to in a number of different ways, including 'bursaries, grants, exhibitions’ or similar. This guidance covers all relevant payments irrespective of their name.

Scholarships are exempt from income tax if the individual is in full-time education at a university, college, school or other educational establishment. Practically, this means that the following conditions must be met:

1. The award is provided to support a student during a period of study – an award made after the course is complete is not a valid scholarship.

2. The holder does not receive the payment as a result of being related to a member of staff within the institution concerned.

3. The holder is a full-time student on an undergraduate course, or a registered full-time student on any postgraduate course up to the level of DPhil or equivalent. Postgraduate students are generally considered to be receiving full-time instruction on the grounds that their research work is subordinate to the main object of acquiring training in research methods. This still applies if the undertake small amounts of paid work (no more than a few hours a week) e.g. teaching or demonstrating. 

Where recipients of scholarships work, even in a limited fashion for the University, condition 5 below must also be considered.

4. The holder is receiving their education at a university, college, school, or other educational establishment.

  • Students undertaking ‘sandwich courses’, where they are placed within an organisation as part of the course, are not covered by the exemption during their time at that organisation. Usually during this period any scholarship will be suspended and the student will receive employment earnings from the organisation in which they are placed. 
  • Research students undertaking a period of research in the laboratories or facilities of a non-educational organisation, are not considered to be in full-time education for the duration of this research. 
  • An educational establishment will include those facilities where a university may have shared occupation of a site with a third party, but teaching is not limited to solely those areas occupied by the university e.g. teaching hospitals. 
  • (Fieldwork does not invalidate this condition as long as it is provided as part of a course that otherwise takes place within an educational establishment.

5. If the holder of the scholarship is also an employee of the University the annual value (excluding any University fee elements) does not exceed £15,480. 

  • The annual limit only applies where a scholarship is provided to an employee. No limit exists where there is no actual or implied employment relationship between the University and student. Where a student also undertakes work for the University, however, there is a risk that this may be construed by HMRC as requiring the student to satisfy this additional condition. It is important, therefore, that the terms of any scholarship award are distinct from the terms of any employment that the student may undertake for the University – i.e. there must be no requirement or obligation as a condition of the award for any element of paid teaching or other work to be undertaken, although it is allowable for applicants to be invited (voluntarily) to undertake such activities separately.

Payments for fees may be made directly to colleges on receipt of an invoice. The maintenance element of the scholarship is likely to paid directly to the student - a Payment Request Form can be used.

An academic visitor for tax and payment purposes:

  • does not have a contract of employment with the University; and
  • will be at Oxford for a limited (and defined) period of time; and
  • is associated with another institution (usually this means as an employee); and
  • will be returning to their own institution upon completion of their visit to Oxford.

There may be tax implications of any payment made to academic visitors depending upon the circumstances of the visit, its duration and the nature of any payments or provisions made:

  • reimbursement or provision of payments to cover expenses is generally not taxable;
  • payment of additional fees, honoraria, stipends, etc. will usually be taxable and will require you to determine employment status of the payee.

If there is a contract of employment or a contract in place, then the visitor must should be paid via payroll and treated in the same way for tax and National Insurance purposes as any other employee.

  1. Reimbursement of expenses 
    An academic visitor may be reimbursed the actual costs of travel, subsistence and other expenses incurred whilst visiting Oxford, via the Expenses process, subject to the requirements of the policy. 
     
  2. Subsistence allowances for visitors from overseas 
    Visitors from overseas (not the UK) can be paid a daily subsistence allowance (i.e. a round-sum payment without the need to produce receipts). This will be treated as taxable unless clearance is obtained from HMRC in advance. 

    To obtain clearance, departments should complete the Tax clearance – short term academic visitor form  and return it to the Payroll Team at least one month in advance of the expected arrival of the visitor. A ruling will be sought from HMRC on whether a daily allowance may be paid without deduction of tax or National Insurance. Once this is received a copy will be sent to the department. 

    Payment should be arranged using a Payment Request Form. When requesting payment, a copy of the HMRC clearance must be attached to each payment request form. 

    HMRC clearance is given only for the specific circumstances and time period provided on the form – if circumstances change or the period of stay is extended then further approval must be sought by completing an additional form.
     

  3. Tax-free payments to visitors from overseas
    Non-UK nationals visiting Oxford for less than six months may be able to obtain tax-free status for income received in the UK or a refund of any tax paid.

If clearance is provided for the payment of round-sum subsistence allowances, as outlined above, then these are paid without deduction of tax or National Insurance.

If clearance is not provided, or payments are to be made in return for work or service, then it may still be possible to pay an individual without having to deduct tax or National Insurance. Alternatively, if tax is deducted, individuals may be able to obtain a refund when they leave the UK. The following HMRC forms are used in both instances:

  1. Form P85 – completed when an individual who is not a UK national leaves the UK after the end of an assignment.

    HMRC no long provide a standard form for overseas visitors to complete and obtain tax exemption on arrival in the UK. In cases where it is believed that tax should not be paid, therefore, (e.g. exemption is claimed under a double taxation agreement) then the individual concerned should advise their head of administration at the earliest opportunity.
     

  2. Heads of Administration should complete form DTA Visiting Academic and forward it to the Head of Payroll. Clearance to pay salary without deduction of tax will be sought from HMRC, but may take up to a month to obtain. Payment of salary without deduction of National Insurance will depend upon which country the individual is arriving from.

An external examiner does not hold a teaching or research post at the University.

  1. Payment for examining
  • First degree - if the degree being examined is a first degree, then payment must be paid via Casual Payroll
  • Research or higher degree - if the degree being examined is a second degree, then payment should be made using the Payment Request Form and made via the Payments Team. 
  1. Reimbursement of expenses
    An external examiner that lives outside Oxford may be reimbursed the actual costs of travel, subsistence and other expenses incurred whilst visiting Oxford and carrying out their specified duties for the University. Claims should be made via the Expenses process, subject to the requirements of the policy, submitted via the Examination Schools.

Please note that University staff may not claim these allowances for themselves or on behalf of external examiners or judges.

The following subsistence limits are in place for external examiners:

  • Overnight stay, including all meals – maximum £100 per night
  • No overnight stay, but time in Oxford plus travelling time exceeds 10 hours - £20 per meal for two meals
  • No overnight stay, but time in Oxford plus travelling time exceeds 10 hours - £20 for one meals

Note: Where overnight stays are involved it is not necessary for meals to be taken in the place of accommodation unless the accommodation charge is inclusive of such meals.
 

Volunteers are those who carry out unpaid work for a charity, voluntary organisation, or a fundraising body. The University uses volunteers to add value to its core activities and promote public engagement and not as a replacement for paid staff. Volunteers are not employees of the University and should be treated in accordance with the terms of the University’s volunteer policy and the volunteer guidance issued by the departments in which they perform their voluntary activities.

1. Reimbursement of expenses
Volunteers may be reimbursed the actual costs of expenses incurred, including travel. For volunteers that do not hold any post, office or employment, the cost of travel can include travel between home and the place where the activities take place without incurring tax.

Claims should be made via the Expenses process, subject to the requirements of the policy.

2. Payment in return for services
Income tax is only chargeable on an individual providing services where that individual:

  • holds an office or an employment. In this context, an office holder includes any individual elected or appointed under the constitution of any body (including sports and social clubs, honorary positions, etc.
  • receives earnings from that office or employment. This includes including round-sum payments to cover time spent and payment in kind as well as cash.

Generally if an office holder receives payment in return for holding that office – then this is usually a taxable arrangement and should be paid via Payroll

3. Payments to Volunteers in Clinical Trials and Research Studies
Special considerations exist for payments to volunteers in clinical trials or research studies e.g. volunteers participating in tests, trials, consultations or interviews.

Participants may be members of the general public or specific groups, the members of which meet criteria that fall within the area of study. Where participants are also members of staff of the University then HMRC regard their participation as distinct from their normal duties of employment – and, thereby, not treated as employment - as long as it occurs within their own time and they are under no obligation to take part. 

Small payments, to cover out of pocket expenses and reasonable compensation for time spent, may be made to volunteers without deduction of tax or National Insurance. It is the responsibility of the recipient to declare this income to HMRC.

In practice, this means that the following procedures must be followed:

 

Subject Payment Value Treatment
Up to £50 Payment may be made via Petty Cash, or a specific float, or vouchers may be issued, obtaining a signed receipt from the payee in all cases.
£51 to £166 Make payment via the Payment Request Form for a cheque via Oracle Financials, including name, address and National Insurance number of the payee. Where anonymity is required, the cheque may be made ‘care of’ the department but the National Insurance number of the payee must still be provided.
Over £166 Refer to the Head of Payroll in advance of any proposed payments – these may be deemed taxable by HMRC. 

When considering payments to visiting instructors, lecturers, speakers or teachers, the following questions should be considered:

  1. Is the individual teaching to an accredited or examined syllabus?
  2. Is the individual expected or required to lecture to material supplied by the department?
  3. Is the individual expected or required to use University equipment, handouts, textbooks, etc?

If the answer to all three is YES – payment should be via Casual Payroll.

If the answer to any one of the above is NO - payment may be made using the Payment Request Form and paid via the Payments Team.

Please use this Visiting Instructors, Lecturers, Speakers, and Teachers Employment Decision Tree (PDF) to help you, and attach a print-out showing your progress through the tree to the payment request.

Contact us


  : Payroll Services
       Finance Division
       University of Oxford
       23-38 Hythe Bridge Street
       Oxford, OX1 2ET

  :  payroll@admin.ox.ac.uk
  :  01865 (6) 16301

 
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