Accounting

Mind the gappers

Many schools offer work experience to gap-year students (gappers) and others such as postgraduates. They tend to be low-pay or no-pay positions. Lorraine Owens explores the employment and tax status of these individuals

Schools have a wide range of titles for gappers and others, but it is important to be clear about their status to ensure that you correctly categorise them for tax and employment law purposes. It matters not what you call them, the facts of each case must be reviewed. Are your gappers volunteers, voluntary workers or workers? It is crucial that you determine this point and you may need to seek employment law advice in this regard.

Volunteer
A volunteer is someone who freely and without any obligation offers their services to a charity in return for nothing. They are free to come and go as they please and should not be bound by terms and conditions or prescriptive requirements. Charities may reimburse expenses incurred in the course of their volunteer work. It is best practice to reimburse against receipts to avoid any possibility of a round-sum allowance which may be taxable and lead to problems with the volunteer’s status arising.

Voluntary worker
A special category of voluntary worker covers those individuals who volunteer for charities in a more structured way and this group is specifically excluded from the right to the National Minimum Wage (NMW). In other words, they may have a job description, set hours and be required to attend on certain days along with the other hallmarks of being a worker, but they are not “workers”. The charity may reimburse expenses incurred in the course of volunteering and may provide accommodation and meals while volunteering where this is relevant to the work they are undertaking: for example, a teaching assistant in a boarding school. Again, stick to receipted expenses. What volunteers may not receive, however, is any remuneration, pocket money, reimbursement of round-sum allowances, honoraria and so on without seriously risking their voluntary worker status.

Worker
Anyone classed as a worker is entitled to the NMW.

Students on higher education courses
Another exception to the NMW which may apply is where work experience the individual is studying on higher education courses or undertaking a course of initial training for teachers at universities or colleges and is placed with an employer as part of their course. As long as the placement is an integral part of a UK-based course of study and is for a maximum of a year, such students need not be paid the NMW.

Gappers
Generally, schools will require that gappers perform specific tasks at set times and commit to work for the school for a period of time. A true volunteer is not bound by such prescriptive obligations, so the gappers are most likely either voluntary workers or workers.

A voluntary worker is exempt from the NMW but only where they are not remunerated for work they undertake. They may receive accommodation and reimbursement for expenses but there must be no element of profit; it would be wise to obtain receipts to support all reimbursements and always avoid round-sum allowances.

If your school is paying an allowance of any kind to a gapper, it is likely that they are workers and, if so, you must pay them at least NMW and pay them through payroll. If you provide accommodation, a small offset is available. The current rate of NMW for workers aged between 18-21 years is £4.92 per hour and the maximum accommodation offset is £4.61 per day. This offset is only available for the days for which you are paying them to work.

If your school is not a charity, the voluntary worker status is not available to your gappers.

Many schools reimburse air fares where the gappers come from abroad. There is a reasonable argument for such expenses to be acceptable where paid to voluntary workers. Where, however, the gappers are workers, any reimbursement of air fares to and from the UK is likely to represent a taxable benefit.

Lorraine Owens is a tax manager at haysmacintyre. 

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