As summer approaches, you may well be considering offering student placements or summer internships. These can provide a great opportunity for the student to gets some practical work experience, and for the employer to spot future talent. However, to make sure both parties get the best out of the experience, it’s important not to let tax or minimum wage issues trip you up.
National Minimum Wage
The most crucial part to get right is the position in respect of the National Minimum Wage (NMW). The range and nature of work experience can vary and it is the employer’s responsibility to make sure that the right NMW is paid, if it is due.
If a student is doing work for you over the summer then they will be entitled to the NMW unless they are providing genuine voluntary services, or the placement falls within a range of exemptions including, for example, work shadowing, where they are purely observing and not carrying out any work. A full list of the exemptions from NMW and further guidance is available on GOV.UK.
Expenses
Where the student is providing a genuinely voluntary service they can be reimbursed any out of pocket expenses including:
- travel expenses (including home to work);
- postage and telephone; and
- protective clothing.
To evidence the costs incurred, receipts should be retained (and/or mileage logs where the student is using their own car).
A normal employee would not be entitled to reimbursement for home to work travel, so it’s very important that the student is definitely fulfilling a volunteer role. This means, for example, that they do not have turn up for work (even if you might expect them to) and cannot be dismissed or sued for breach of contract.
Support for students
If your placement students have concerns about their tax position you might want to direct them to a dedicated Tax Guide for Students, run by the Low Incomes Tax Reform Group (LITRG). This covers a number of matters relevant to students, including their positon when volunteering or training.