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HMRC internal manual

Employment Income Manual

Employment income: scholarship income: miscellaneous awards: research awards or fellowships

Section 776 IT(TOI)A 2005 (Section 331 ICTA 1988)

Research awards or fellowships are sometimes offered to qualified individuals, who have normally completed their post-graduate training, to enable them to undertake a specific research project over a fixed period. As there is usually no question of full-time instruction, the scholarship exemption under Section 331 does not apply (see EIM06205). Whether payments made to the holder of the award or fellowship are chargeable to tax will depend on the particular facts. There is unlikely to be a contract of employment. If the holder of the award is engaged under an enforceable contract to provide services, for example, to research a particular project, in return for a fee any liability to tax will be under the Miscellaneous Income rules (see BIM65151).

A postgraduate student employed by an industrial concern may be awarded a fellowship by his employer. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)