Payments to Employees Attending Full-Time Education Courses - Tax and NICs exemption limit increases for 2007/08 academic year

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Under the provisions of HMRC's Statement of Practice 4/86 Payments Made By Employers To Employees When In Full-Time Attendance At Universities And Technical Colleges, payments made to employees for periods of attendance at full-time educational courses (including sandwich courses) at a recognised academic establishment are treated as exempt from income tax where certain conditions are met.

One of the conditions is that payments in respect of an academic year, i.e. the period beginning on 1 September and ending on the following 31 August, must not exceed a specified financial limit. That limit was set at £15,000 for the 2005/06 and 2006/07 academic years. From the 2007/08 academic year, starting 1 September 2007, the limit is increased to £15,480. Regulations have been made to increase the limit also for NICs purposes.

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Further information:
Increased tax/NICs free limit
The Social Security (Contributions) (Amendment No. 7) Regulations 2007
Explanatory Memorandum to the Social Security (Contributions) (Amendment No. 7) Regulations 2007

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