Taxing nurses resettlment grant.

icg42

My friends nice has arrived from the Philippines to work as a NHS Nurse. The hospital trust has given her a re-settling grant but the Inland Revenue class this as unearned income and taken almost half back.

Surely this grant should be free of tax?

She hasn’t even done any work so far and will be spending the first month in training and probationary exams.

Can this be right?

Not a warm welcome!

LinLui

Income is generally not tax free for anyone. There are things that may be claimed against tax, some of which are specific to certain relocation costs. But people coming from abroad pay tax in the same way that you or I do. I am fully supportive of NHS nurses (and other public servants) being renumerated fairly, but that shouldn't mean being treated better than anyone else. And very few people get given money by an employer for not having done any work! I think it is fair that the employer recognises and supports some of the financial costs incurred in relocating, but not to the extent that she is being treated significantly differently from someone who has relocated from Devon to Lancashire. 

She may be able to claim some of those expenses and get an adjustment to her tax when she starts working - if she joins the union then they often have services that will advise on what she could claim and how to do it. 

sammyjammy

Nearly half?  Very unlikely.

Andy_L

What has her employer said when asked?

What did the offer paperwork say about taxation of the grant?

gwynlas

She should check this out with the HR department if it is a regular practice of the Health Trust it would border on dishonesty to say you are paying a relocation sum without also indicating that this would be subject to tax at source. It might be that she's been given an emergency tax code as a new starter and be due a rebate further along the line.

LinLui

sammyjammy said:

Nearly half?  Very unlikely.

Actually that's possible. If it's a large enough sum of money from the employer, the default for HMRC may be that she'll get that much money every month,  and therefore be in the 40% tax band. If that is what has happened it will resolve over the year. I know the same thing happened to doctor I know - I am sure she won't have got anywhere near the same as he did,  but his resettlement amount was £18,500. And whilst a doctor,  he isn't in the "upper echelons". But I guess that's cheaper and faster than the alternatives to getting doctors for the NHS. I know a few local authorities are doing the same thing to attract foreign social workers.

icg42

Thaks all,

Well a Nurse isnt being given 18K not even 18 hundread, if the grant represents salary then they will only be in the basic tax band.

So hopefully it will even out over a year once she recievs her tax code and not remain as unearned income.

Marcon

icg42 said:

Thaks all,

Well a Nurse isnt being given 18K not even 18 hundread, if the grant represents salary then they will only be in the basic tax band.

So hopefully it will even out over a year once she recievs her tax code and not remain as unearned income.

Is she worried about asking her employer and in case it 'makes a bad impression' ? She really doesn't need to be - and you can bet there are others wondering the same thing.

LinLui

Marcon said:

icg42 said:

Thaks all,

Well a Nurse isnt being given 18K not even 18 hundread, if the grant represents salary then they will only be in the basic tax band.

So hopefully it will even out over a year once she recievs her tax code and not remain as unearned income.

Is she worried about asking her employer and in case it 'makes a bad impression' ? She really doesn't need to be - and you can bet there are others wondering the same thing.

I think this is a really good idea. I really don't know a lot of tax details, but I did look this up,  and there's a snag it appears. If this is relocation compensation there are tax free elements. But if it is literally a "grant" ( which you say) then it is never treated as income and you do get clobbered by tax. I can't think the NHS meant that to happen. Being taxed the same way anyone else would be is fair.  But this doesn't seem right?  So I'd check something hasn't been missed in translation. 

And I still stand by - tell her to join a union.  Now.  Don't put it off. Its the best investment in her job she can make. 

icg42

Sure , Union membership will give access to full info, and I'm third hand on details, and there are many pressing things for all the expat HNS staff coming here. Not least of which are somewhere to live, places to eat , Bank Card in cashless world, etc,etc. The sponcer agency are helping of course but they are the agent of the employer!