Are Bursaries and Scholarships Taxable in the UK? This is a valid question anyone expecting financial aid for their tuition should ask, and why the answer to that is usually no, there are exceptions. But before we get into that proper, let’s understand what bursary and scholarship entail.
Bursaries and scholarships are financial awards that are given to students to help them with the cost of their education. They are typically awarded based on academic merit, financial need, or other criteria. Bursaries are usually need-based, while scholarships are usually merit-based.
Most bursaries and scholarships in the UK are exempt from income tax. This means that you do not have to pay tax on the money you receive. There are a few exceptions to this rule, but these are relatively rare.
For example, if you receive a bursary or scholarship from your employer, it may be taxable. This is because it is considered to be part of your employment income.
However, if you receive a bursary or scholarship from an independent body, such as a charity or educational institution, it is likely to be tax-free.
If you are unsure whether your bursary or scholarship is taxable, you should contact the body that awarded it to you. They will be able to give you more information about the tax implications of the award.
Or you can just read through this article to learn all that you need to know about bursaries and financial aid taxation.
We will also answer other questions like Is an NHS bursary taxable, Do you have to pay back a scholarship or a bursary? and much more.
Table of contents
- Do you pay tax on a university scholarship?
- Are any scholarships taxed in the UK?
- Is a bursary considered taxable income in the UK?
- Is an NHS bursary taxable?
- Do you have to pay back a scholarship or a bursary?
- Do students in the UK have to pay taxes?
- Here are some additional things to keep in mind:
- FAQs: Are Bursaries and Scholarships Taxable in the UK?
- Are Bursaries and Scholarships Taxable in the UK?: Conclusion
- References
- Recommendations
Do you pay tax on a university scholarship?
No, you do not pay tax on a university scholarship in the UK. University scholarships are considered to be a form of educational assistance, and they are exempt from income tax.
Are any scholarships taxed in the UK?
Yes, there are a few scholarships that are taxable in the UK. These are typically scholarships that are awarded by employers. However, the vast majority of scholarships in the UK are tax-free.
If you are unsure whether your scholarship is taxable, you should contact the body that awarded it to you. They will be able to give you more information about the tax implications of the award.
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Are any scholarships taxed in the UK?
The vast majority of scholarships in the UK are exempt from taxation. However, there are a few exceptions, such as:
- Scholarships that are awarded as a condition of employment
- Scholarships that are awarded in exchange for services
- Scholarships that are paid to students from overseas who are not resident in the UK
If you are unsure whether your scholarship is taxable, you should contact the awarding body or HMRC.
Is a bursary considered taxable income in the UK?
No, bursaries are not considered taxable income in the UK. This means that you do not have to pay tax on them. Bursaries are typically awarded to students who are from low-income families or who have specific financial needs.
They are intended to help students cover the costs of their education, such as tuition fees, living expenses, and books.
If you receive a bursary, you will not need to declare it on your tax return. However, you may need to declare it if you are applying for a student loan or other forms of financial assistance.
Here are some examples of tax-free bursaries and scholarships in the UK:
- NHS bursaries for student nurses and midwives
- Teacher training bursaries
- Scholarships awarded by universities and colleges
- Scholarships awarded by charities and other independent bodies
Here are some examples of bursaries that are not taxable in the UK:
- NHS Bursary
- Disabled Students’ Allowance (DSA)
- Care Leavers’ Bursary
- National Scholarship Programme (NSP)
- Access to Higher Education Fund (AHEF)
If you are unsure whether your bursary is taxable, you should contact the awarding body or HMRC.
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What types of scholarships are there?
The UK educational system has lots of financial aid programs from universities and private individuals to assist both local and international students.
However, most of these programs boast strict eligibility criteria that you are expected to meet to be picked.
Additionally, they are competitive and are usually given to most deserving students
There are also more scholarships, bursaries, and fee waivers available for postgraduate and research students than for undergraduates, so check what the university offers before applying.
Why are international student fees higher?
Their fees are usually higher because most times they also have to pay for the cost of maintaining an institution/visa team where applicable.
It could also be that the excess money they pay is used to retain the visa sponsor status of the universities they choose.
They can also subsidize a university’s academic research, which in turn can help build its reputation.
Why is it worth studying in the UK?
Currently, 20% of all UK students studying in higher education are international students – around 15% are undergraduates and 37% are postgraduates (Universities UK, 2020).
After the US, the UK is the second most popular destination in the world for international students – thecompleteuniversityguide.co.uk
Is an NHS bursary taxable?
No, an NHS bursary is not taxable. It is considered to be a grant, rather than income, so you do not need to pay tax on it. This means that it is not included in your total income for the year, and you do not need to declare it on your tax return.
Do you have to pay back a scholarship or a bursary?
Most scholarships and bursaries do not need to be paid back. However, there are some exceptions. For example, some scholarships and bursaries are awarded on condition that you work for a certain period after you graduate. If you do not meet this condition, you may need to pay back the scholarship or bursary.
It is important to read the terms and conditions of any scholarship or bursary you are awarded carefully to check whether you will need to pay it back.
Here are some examples of when you may need to pay back a scholarship or bursary:
- If you do not complete your course of study
- If you are expelled from your course of study
- If you do not work for a certain period after you graduate if this is a condition of the scholarship or bursary
- If you breach the terms and conditions of the scholarship or bursary in any other way
If you are unsure whether you will need to pay back a scholarship or bursary, you should contact the organization that awarded it to you.
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Do students in the UK have to pay taxes?
Yes, students in the UK may have to pay taxes, depending on their circumstances.
- Income tax: Students who work while they study have to pay income tax if they earn more than their allowance, which is £12,570 in the 2023-24 tax year.
- National Insurance: Students who work while they study also have to pay National Insurance if they earn more than the lower earnings limit, which is £190 a week in the 2023-24 tax year.
Foreign students who work in the UK may have to pay UK tax on their income, even if they are not domiciled in the UK. However, there are double taxation agreements in place with many countries, which means that students may not have to pay tax on the same income in both the UK and their home country.
If you are a student in the UK and you are unsure whether you have to pay taxes, or how much tax you should pay, you can contact the HM Revenue and Customs (HMRC) for advice.
Here are some additional things to keep in mind:
- Self-employed students have to pay income tax and National Insurance on their profits.
- Students who receive income from investments or other sources, such as savings interest or rental income, may also have to pay income tax.
- Students who receive scholarships or bursaries may not have to pay income tax on this income, but they should check with HMRC to be sure.
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FAQs: Are Bursaries and Scholarships Taxable in the UK?
Bursaries are typically need-based, while scholarships are typically merit-based.
Yes, there are a few exceptions to the rule that most bursaries and scholarships are exempt from taxation
If you are unsure whether or not your bursary or scholarship is taxable, you should contact HMRC for advice
If you have been taxed on your bursary or scholarship, you can contact HMRC to claim a refund. You will need to provide evidence that the bursary or scholarship is exempt from taxation.
Are Bursaries and Scholarships Taxable in the UK?: Conclusion
Most bursaries and scholarships in the UK are exempt from taxation. However, there are a few exceptions to this rule, such as bursaries or scholarships that are specifically intended to cover the cost of living expenses, or bursaries or scholarships that are received from your employer.
If you are unsure whether or not your bursary or scholarship is taxable, you should contact HMRC for advice
It is important to note that even if your bursary or scholarship is tax-free, it may still affect your entitlement to other benefits, such as tax credits or Universal Credit. You should contact HM Revenue and Customs (HMRC) to check how your bursary or scholarship will affect your tax and benefit entitlements
References
- thinkstudent.co.uk- Are Bursaries and Scholarships Taxable
- litrg.org.uk- Do I have Pay tax scholarships and awards
- savethestudent.org- Student tax facts you need to know
- Thecompleteuniversityguide.co.uk – International student tuition fees
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