Re: [Fsfe-uk] Grants programme

[Jason Clifford]

On Tue, 21 Nov 2006, Alex Hudson wrote:

> (did you mean to send this to the list?)

Yes. Thanks for pointing it out - I've taken it back.

> To be honest, I don't know for sure, but I would suspect that there
> would be some involvement - if only for the fact that most students tend
> to be on emergency tax codes (at least, that's my experience) so you end
> up having to claim stuff back.
> 
> I _thought_ that the employer's thresholds were lower than personal
> thresholds, but I don't keep up with that kind of thing.

The threshold for paying income tax is £420 per month.

For NI there are 2 important thresholds - the Lower Earnings Limit (LEL) 
and the Earnings Threshold (ET). The LEL is £364 per month. The ET is £420 
per month.

No NI (either employees or employers) is payment on any income below the 
ET.  There is a reason for this:

"This is the minimum level of earnings that an employee needs to qualify 
for benefits, such as Retirement Pension and Jobseekers Allowance. If an 
employee.s earnings reach or exceed this level, but do not exceed the 
Earnings Threshold, they will not pay NICs but will be treated as having 
paid them when claiming benefit."

> I think you're probably right. I think there is a downside, though,
> which is all the extra complication employment brings - if the
> relationship went pear-shaped, you potentially have employment rights to
> battle with.

That's true however they may well arise anyway by virtue of a deemed 
employment and that could give rise to other problems such as being 
prosecuted for avoidance.
 
> I'll try to have a think if there's anyone I know with some actual
> accounting expertise we can tap.

That would help.

Jason
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