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HMRC internal manual

Employment Status Manual

Tax and NICs consequences

A contract of training will not usually give rise to any charge to income tax or liability for NICs. There is only a remote possibility that there might be a charge under Case III of Schedule D.

It should however be noted that, in the context of the overall arrangements, payments received during a training period may actually be inducement payments or “golden hellos” and therefore chargeable as employment income (see EIM00700).

The provisions of Statement of Practice 4/86 should be borne in mind when considering the income tax consequences (see EIM6235) of payments to individuals released by employers to undertake a full-time educational course, including a “sandwich” course, at a university, technical college, or similar educational establishment.