Student interns, overseas aspects and supervisory counsellors

12 February 2024      Julia Ascott, Employment Taxes Specialist

Two fascinating subject matters were discussed at today's Employment Tax Surgery - the first dealt with students and the second, supervisory counsellors - with both having an employment status flavour that can't seem to be avoided! 

Students - interning at third parties or visiting from overseas

Students are not employees, but sometimes they can be... This makes life difficult for universities because we have to decide whether students are carrying out work/research as a student or for the benefit of the university as an employee. There's a fine and (typically) complex line.

During the latest Employment Tax Surgery, we firstly discussed visiting student researchers attending a UK university for a short-term period (typically 4-6 weeks). Whilst there may not be an income tax liability as the individual is from a country with which the UK holds a Double Taxation Agreement with, this doesn't stop there being a PAYE obligation from day one IF the student is carrying out work for the benefit of their UK economic employer (i.e. the UK university hosting the student).

The result of this discussion was, inevitably, seeking the views of HMRC for clarification and genuine grounds of change for simplification purposes (without tax loss to the government coffers). 

Secondly, we discussed the position of a university where one of their students takes up a sponsored internship at a third party and that third party refuses (for one reason or another) the administrative burden of paying the student (and operating PAYE on that income), insisting that the university takes responsibility instead. Does the UK university relinquish the obligation of the third party? It's doubtful HMRC would agree.

Supervisory counsellors 

The British Association of Counsellors and Psychotherapists mandates counsellers have a minimum of 1.5 hours of supervisory sessions for their accredited members. Universities often contract with supervisory counsellor sessions for their counsellor employees (who might contract with the supervisor on behalf of the counsellor). In the discussions, it was clear that boiler plate contracts are often used ("we've always used this contract") for the engagement of self-employed individuals without ensuring they are fit for purpose.

If you have a contract "you always use", perhaps now is the time to review whether it works for every, single scenario and I don't feel like I'm spoiling the end of the book by saying "it doesn't". 

Dealing with these various employment status scenarios can often feel like you are wading in treacle whilst your peers throw golden syrup over you and ask you to pick a pristine piece of paper up without getting it sticky... When in doubt, go to the basics:

  1. get the contract and the arrangements to match, then treat as employed or self-employed based on those facts
  2. if you don't like that an arrangement has come out as employed - change the scope of the arrangements. DO NOT change the contract or change the decision without changing the scope and aligning all three
  3. join an employment tax or employment status surgery, or post in the BUFDG discussion board for trusted ears and opinions

To join us at future employment tax surgeries, which are held monthly, take a look at our events calendar.

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