07 November 2022 
Julia Ascott, Employment Taxes Specialist
HMRC has provided the following statement on stipends:
“If no employer relationship exists then the university does not need to be concerned with the £15,480 threshold.
Where there is no employment relationship any income from a scholarship is exempt from income tax and disregarded for all income tax purposes, if the holder of the scholarship is receiving full-time education at a university, college, school or other educational establishment. The statement of practice (and £15,480 threshold) only comes into play when those payments are made by an employer to an employee.”
Whilst we were aware that there should be no tax implications if a genuine stipend is paid to a student (who is not also an employee), it is satisfying that HMRC have confirmed they will not need to be contacted if a genuine stipend exceeds £15,480. Given that UKRI’s minimum stipend is well above this figure, hopefully this should provide most universities with comfort that they do not need to deduct any taxes from the payment.
Universities must ensure, however, that their stipend receiving students are not undertaking any employment duties. Only then, would there be issues with paying more than the £15,480.
