At present, employers can make certain payments to working full time students, without income tax being taken, under the Inland Revenues Statement of Practice 4/86. From September 1st, tax-free payments made by employers will be increased from £7,000 to £15000 and will be exempt from National Insurance Contributions.
Currently, payments are only exempt if they are made under a training contract, and are liable to national insurance contributions if they are paid under an employment contract. The allowance is now to be reviewed annually, and always around the start of the academic year.
Our view
A great deal if you can get it. We have not come across many employers that have looked at this scheme.