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Chapter EIM61200

Document Cited in Related
Vincent
Published date22 May 2014
Record NumberEIM61200
CourtHM Revenue & Customs

Trainee educational psychologists are engaged under contracts of training for all or part of their training depending on the Programme under which they were trained. While engaged on a training contract they receive educational maintenance grants. These are not earnings for income tax or NICs purposes.

Statement of Practice SP4/86 is not relevant to these trainees as they are not employed by the host local authority (see below).

If a training grant is subjected to PAYE or has Class 1 NICs accounted for in error you should obtain all of the papers and process the repayments. See Business Guidance Note BGN005/07.

Training Programme for educational psychologists 1996 – 2006

Trainees under this Programme entered into a training contract with the Local Government Employers (LGE) (previously the Employer’s Organisation for Local Government). Trainees were usually serving teachers or local government officers. They were required to resign from their teaching jobs and appointed to “host” local education authorities (LEAs) as trainees for 1 academic year (1 September to 31 August following). During the year trainees were required to complete a course of university study leading to the award of a Masters Degree in Educational Psychology.

The “host” local authority issued contracts of employment to the trainees and paid what they believed to be salary.

HMRC reviewed the arrangements in 2005 and decided that the trainees were engaged under contracts of training. Trainees who had...

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