Is tax payable on MSc sponsorship?

emmo709

Hi,

Can anyone advise me if I need to pay tax on MSc sponsorship from a firm (that I don't work for) and if so are there any tax thresholds or allowances for the fees I'll have to pay on the course etc?

The course will be a one year unfunded sabbatical from my own employer, but with 4 kids I need some financial help and benefits aren't the way I want to go, although I don't know if it's an option anyway. I'm also interested to know if I was to do some research for them, would this then be classed as employment and therefore change things?

Thanks for reading and if you need any more detail please let me know.

melancholly

if you get paid as a stipend, then it's not taxable. there won't be any loans for MSc fees, but if it's a stipend payment, you then get your full tax free allowance.

how exactly is the sponsorship refered to? would it be paid direct from the company or via the university?

emmo709

Thanks for the speedy response Meloncholly.

The payment would be direct to myself from the company. One of my main concerns is the fact that I have asked for £30k and I'm not sure if there's a threshold where tax becomes payable or is allowed as a stipend.

I wasn't familiar with the term 'stipend' but have googled it. Can this apply to Ltd company sponsorship as it seems to be based on funding from Research councils?

agrinnall

emmo709 wrote: »

Thanks for the speedy response Meloncholly.

The payment would be direct to myself from the company. One of my main concerns is the fact that I have asked for £30k and I'm not sure if there's a threshold where tax becomes payable or is allowed as a stipend.

I wasn't familiar with the term 'stipend' but have googled it. Can this apply to Ltd company sponsorship as it seems to be based on funding from Research councils?

You've asked for £30K:exclamati, how likely do you think it is you're going to get that for a 1 year course? That seems an incredible amount to ask for, way more than it would cost you to do the course. I can't see why any company would give that much money to one person who has has nothing to do with the company.

melancholly

ok... well a stipend would be in the order of £1400 a month... so £30K is a whole lot more and, i'd imagine if it came from the company directly, would count as a salary not a stipend. then you'd get taxed normally as with any income. i'd imagine £30K would go pretty far to funding everything! if you get that amount, i'd be impressed - good luck with the application though.

emmo709

Guys thanks for the advice. Taxed eh! oh well, worth a try.

I intend to give the IR a call to clarify the situation, but would it be worth setting up as a sole trader/self employed indvidual to place the fees and other IT of the course as business costs, as these requirements will be likely to come to around £10K.