ESM4150 - Particular occupations: examiners - general
SS (Categorisation of Earners) Regulations 1978 (SI 1978 No.1689) paragraph 6 in Part II of Schedule 1
Most fees paid by examining bodies are chargeable to tax as employment income. In the majority of cases tax is deducted from such fees under special arrangements negotiated centrally under Regulation 141 SI 2003 No. 2682. The PAYE Manual at PAYE70245 provides a list of the bodies covered by these special arrangements.
Other payments made by examining boards, which are chargeable to tax as employment income, are subject to PAYE in the normal way.
For NICs purposes, the above Regulations provide that examiners, moderators, invigilators etc or question setters for examinations leading to any certificate, diploma, degree or professional qualification, are to be treated as self-employed if the whole of the work is performed under a contract in less than twelve months. They are therefore liable to pay:
- Class 2 NICs, and
- if their profits exceed the lower profits limit, special Class 4 NICs
Taxpayers should be advised to record the amount of the examiners’ fees in the ‘additional information’ section of the SA return. HMRC should calculate the Class 4 NICs due and show the amount as ‘accepted’ in box 18.2B. On no account should a credit be shown in box 3.98 of the self-employment pages, as this could result in an overcharge of income tax.