6. Payments to Students, Visiting Academics, and Volunteers

6.2 Students and work

(a) Scope and application

This section relates to payments to students for work whilst studying on University-provided courses at undergraduate or postgraduate level.

(b) Students working during vacations

Special tax rules apply to students on UK courses who are employed only during normal holiday or vacation periods. Tax is not normally deducted from payments for this work provided that they meet the conditions for exemption specified on HMRC form P38(S).

P38(S) - conditions for paying students without deduction of tax:

The student will remain in full-time education until the end of the tax year in which the application is made;
The student will only work during vacation periods;
Total earnings of the student (including any allowances paid for periods of unemployment and income from all sources except for scholarships or educational grants) does not exceed the income tax personal allowance.

Application for payment must be made by the employer on form P38(S) in advance of any payment made.

Work during vacations does not invalidate the conditions for being in full-time education that apply to student scholarship payments.

Note: If a student works both within vacations and during term time then these rules do not apply and the guidance under section (c) below should be followed.

(c) Students working during term time

The P38(S) route is not available to students working during term time, including evening or part-time work. Payments to students in return for work that cannot be exempted from tax must be treated in the same manner as payments to University staff.

Students in receipt of a scholarship must be careful not to undertake work that jeopardizes the tax exemption of their scholarship - see section 6.1.

(d) Foreign students

The guidance in this section applies equally to both UK and foreign students.