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HMRC internal manual

PAYE Manual

Employer records: set up employer record: EXAM scheme - examination fees

Note: This guidance relates to the operation of Examination Schemes for tax years up to and including 2013-14. From 2014-15 onwards these schemes will operate under standard PAYE arrangements.

EXAM scheme type is used where Universities pay fees to examiners, invigilators, settlers and for all related duties in any way connected with

  • GCSE and ‘A’ level examinations conducted by the various examining boards


  • First degree examinations conducted by Universities

Employers use the following special PAYE arrangements when operating an EXAM scheme

  • Class 1 NIC contributions are not due
  • Forms P45, P46 and P60 are not issued
  • Tax is not deducted from payments made to an examiner who declares on form P524 that they are not liable to tax
  • Tax is deducted at basic rate from all other payments
  • Form P525 is provided to those examiners that have been taxed showing

    • Tax year
    • Examiner’s name, address and NINO
    • Details of the examination for which the payments were made
    • Amount paid and tax deducted
    • Expenses reimbursed but not included with pay

Forms P525 are accepted as evidence of tax deducted if examiners wish to claim a repayment. Duplicate forms P525 are not provided, therefore an examiner may approach you for confirmation of their pay and tax details. You must provide any details required on request.

The employer will submit a return at the end of the year with lists to cover payments made to

  • External examiners engaged by Universities for masters degrees and doctorates
  • Those who have completed the P524 declaration
  • Those taxed at basic rate

The lists must show

* Tax year
* Taxpayer name
* Total Payments made
* Total tax deducted (where no tax has been deducted show £0.00)

Payments made to external examiners engaged by Universities for masters degrees and doctorates generally fall within SA.