What "allowances" to pay interns...?

A client has interns as part of a college course - what allowances can be paid...?

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So, a small client has a couple of interns in two days a week as part of a college course.  One particular student has said that they are finding the "unpaid" element very difficult and are considering giving up their college course. This particular student is very promising, and the client feels that it would be a shame to lose them to the profession.  What "allowances" could the client pay them (maybe travel and lunch to a "reasonable" amount ?) but how much is "reasonable", and if they go above that, how do we treat (PAYE payroll or not...?)

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Stepurhan
By stepurhan
21st Oct 2020 15:55

Your client has two part-time employees and wants to know what to pay them? The following link is likely to be helpful.

https://www.gov.uk/national-minimum-wage-rates

If you don't think that link is helpful to this particular situation perhaps you could explain why you think it doesn't apply.

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Replying to stepurhan:
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By Anonymous.
21st Oct 2020 16:11

stepurhan wrote:

Your client has two part-time employees and wants to know what to pay them? The following link is likely to be helpful.

https://www.gov.uk/national-minimum-wage-rates

If you don't think that link is helpful to this particular situation perhaps you could explain why you think it doesn't apply.

I thought that initially but there are, apparently, exceptions. Why not just do the decent thing and pay then NMW for their 2 day week?? Wouldn't cost a fortune.

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Replying to Anonymous.:
Stepurhan
By stepurhan
21st Oct 2020 17:26

Is anyone able to point to the exceptions that allow interns as voluntary workers?

Sounds like a system that is wide open to abuse so I'd be interested in knowing what limitations there are on classifying someone as an "intern". The fact that the OP asks about "allowances" rather than asking if wages can be paid to interns reinforces that view somewhat.

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By Anonymous.
21st Oct 2020 20:06

stepurhan wrote:

Is anyone able to point to the exceptions that allow interns as voluntary workers?

Sounds like a system that is wide open to abuse so I'd be interested in knowing what limitations there are on classifying someone as an "intern". The fact that the OP asks about "allowances" rather than asking if wages can be paid to interns reinforces that view somewhat.

This is what I found but it's not as clear as you might hope.

https://www.gov.uk/employment-rights-for-interns

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Replying to Anonymous.:
Stepurhan
By stepurhan
21st Oct 2020 20:20

Anonymous. wrote:

This is what I found but it's not as clear as you might hope.

https://www.gov.uk/employment-rights-for-interns

Thank you for that.

As you say, not very clear. Sadly an all too common theme on gov.uk "guidance" these days.

But, even with that in mind, is the client getting valuable work out of the interns? If they are (and the fact that the question is even being raised indicates they are) then surely NMW is the way to go. Otherwise the client is exploiting a loophole to get free workers. I'd feel ethically uncomfortable about that, even if the legal position is fine.

As has already been said, the intern having another job is a red herring. They are currently receiving nothing so anything they get paid (even if subject to BR tax) is going to be an improvement for them.

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By Paul Crowley
22nd Oct 2020 04:09

Good link
But as always reliant upon HMRC view, which is regularly wrong but does confirm not worker in this case

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Replying to stepurhan:
By Duggimon
21st Oct 2020 17:02

The national minimum wage applies to employees, interns are voluntary workers.

Still, I agree the solution is to just pay them wages, if they're otherwise students with no other job then there's no real tax consequences to speak of.

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Replying to stepurhan:
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By BillM
21st Oct 2020 17:56

Thanks for your response. Where the intern is placed as part of a college course, they are not ENTITLED to NMW. But of course, your good self and other responders have touched upon the moral question - if the employer is deriving ANY benefit from the students’ presence, is there almost an obligation to pay “something”...? Without wanting to go in to this particular student’s personal details, I believe that they may have another part time job, which could mean that any “allowances” here would involve BR tax. To legally alleviate that, I was wondering how much travel and subsistence allowances (as for volunteers) would be considered “reasonable”, and could be paid outside the scope of tax and NI. I’m presuming that anything in excess would have to be run through the payroll.

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By Paul Crowley
21st Oct 2020 18:30

Trivial benefits?

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By Matrix
21st Oct 2020 18:37

Wouldn’t they rather have 80% of something than nothing?

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Replying to BillM:
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By Paul Crowley
22nd Oct 2020 04:20

I have endless requests from people wanting work experience, and will work for free.
Result is I now have two more employees that I pay just above NMW at highest rate.
Never yet managed to add their time cost to a real bill
The opposite
My time spent on jobs is increased when they are involved.

However I suspect that they have no idea of the business reality and think they are really working

Both chose to be furloughed for three months on shielding and no school. I got more efficient in that period, they became deskilled in that period
BUT we like them both and accept the position

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