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External examiner fees (research degree) in tax return

fryderykchopin
fryderykchopin Posts: 83 Forumite
Fourth Anniversary 10 Posts
edited 11 May 2022 at 9:27AM in Cutting tax
I hope this is an appropriate place to post this.

I am academic staff in a UK university (University A) and last year I was invited to be external examiner in a PhD viva examination for another UK university (University B ). Not sure if relevant, but I used to work for University B many years ago, and currently I work for University A only.

University B paid me £175 as fees for the external examiner service. Their fees claim form says that "Research Degree Examiners may be regarded as self-employed so payment will be made gross." Based on this, I would assume that I can claim my trading income allowance, so I don't need to include the £175 fees paid by University B in my self assessment tax return. Is this assumption correct?

However, I'm confused because University B has given me a P45 form that states £0 as the total pay and total taxes in this employment and has reported these figures to HMRC, so my self assessment account shows two employers in the 2021-22 tax year (University A and University B ), with the correct income reported by University A and £0 reported by University B. If University B regards me as self-employed for this job, why would they issue me with a p45?

In addition to this, University B has also given to me a payslip with the payroll number I had when I used to work for them in the past, showing the £175 that I have received from them. What should I do about this? In my draft return I have declared 2 employers this tax year and entered a £0 pay/tax for University B (based on what the P45 says), but I'm not sure if this is the right way to proceed.

Thank you

Comments

  • tacpot12
    tacpot12 Posts: 9,342 Forumite
    Ninth Anniversary 1,000 Posts Name Dropper
    If you don't get an answer here, I would suggest you call HMRC on the Self-Assessment helpline and ask if this income is earned income from an employment or self-employed income. Make a note of the name of the adviser you speak to and the date and time of the call. 
    The comments I post are my personal opinion. While I try to check everything is correct before posting, I can and do make mistakes, so always try to check official information sources before relying on my posts.
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
    Eighth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 11 May 2022 at 1:35PM
    Some institutions issue payslips to self-employed persons e.g. sub-contractors as a form of receipt (and I know that these are included on returns by the employer). On the payslip - does it indicate a figure for ‘taxable pay’ or ‘taxable pay to date’ ? 

    While offering this as a possible explanation, I really don’t understand why a P45 would be issued in that circumstance.
  • fryderykchopin
    fryderykchopin Posts: 83 Forumite
    Fourth Anniversary 10 Posts
    edited 22 January 2024 at 3:51PM
    Some institutions issue payslips to self-employed persons e.g. sub-contractors as a form of receipt (and I know that these are included on returns by the employer). On the payslip - does it indicate a figure for ‘taxable pay’ or ‘taxable pay to date’ ? 

    While offering this as a possible explanation, I really don’t understand why a P45 would be issued in that circumstance.
    The payslip just shows the 'total payments', nothing in the deductions section. The cumulatives section only shows a figure for the total gross and zero for everything else (including taxable gross = 0).
  • jimmo
    jimmo Posts: 2,287 Forumite
    Part of the Furniture 1,000 Posts Name Dropper

    Your income as an external examiner above degree level is correctly chargeable as trading income.

    ESM4151 - Employment Status Manual - HMRC internal manual - GOV.UK (www.gov.uk)

     

    As the gross income to be declared is less than £1,000 you can claim the Trading Allowance so that no tax is chargeable.

    Tax-free allowances on property and trading income - GOV.UK (www.gov.uk)

     

    If you are required to complete a Self Assessment Return you need to declare the income and claim the Trading Allowance but if not there is no need to register for SA just because of the external examiner income

     

    I bow to Pudyoaten2's superior knowledge about Universities and payslips and, If it were me, I would complete my Return correctly, not declaring a second employment.

     

    You would be incredibly unlucky if HMRC challenged you for not declaring zero earnings.


  • jimmo said:

    Your income as an external examiner above degree level is correctly chargeable as trading income.

    ESM4151 - Employment Status Manual - HMRC internal manual - GOV.UK (www.gov.uk)

     

    As the gross income to be declared is less than £1,000 you can claim the Trading Allowance so that no tax is chargeable.

    Tax-free allowances on property and trading income - GOV.UK (www.gov.uk)

     

    If you are required to complete a Self Assessment Return you need to declare the income and claim the Trading Allowance but if not there is no need to register for SA just because of the external examiner income

     

    I bow to Pudyoaten2's superior knowledge about Universities and payslips and, If it were me, I would complete my Return correctly, not declaring a second employment.

     

    You would be incredibly unlucky if HMRC challenged you for not declaring zero earnings.


    Agree that it is trading income - the P45 issue has muddied the waters. 

    On the trading allowance, and having completed my own return today, I note that in ‘tailor your return’ the question is ‘ have you received income from a trade exceeding £1000 (or similar wording)?

    Answering ‘No’ will lead to the self-employed section not appearing further in the return completion. 

    No need to complete if self-employed income £1000 or less.

    see notes attached with respect to the trading income allowance (page 2)

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1062332/sa150-Notes-2022.pdf
  • Thank you jimmo and purdyoaten2 for your detailed responses and recommendations, it was very helpful.
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