HMRC internal manual

Employment Income Manual

EIM10500 - Employment income: work experience payments to young people

There is no charge to tax on payments made to young people taking part in government or other work experience schemes if they hold the status of trainee and not employee (see EIM06210,).

If they are employees, however, their pay will be taxable as employment income. It is possible for young persons under the youth training schemes to be engaged as employees. Those taking part in the New Workers Scheme are always treated as employees.

Private bodies, companies, local authorities, etc., who plan to introduce work experience or training schemes may sometimes apply for financial support from the European Union, in particular the European Social Fund (ESF). This source of funding has no special significance for tax purposes. The taxation treatment of allowances paid to participants will still depend on whether they are trainees or employees.