Do you pay tax on research study payments in the UK?

This is one of the most common questions people ask before they sign up for their first paid study, and the honest answer is that it depends on how much you earn from it and what else is going on in your finances. What follows is general information, not tax or benefits advice. If your situation is complicated, speak to HMRC or a free advice service such as Citizens Advice.

Key points

• Occasional study payments are not automatically treated like wages.
• Keep a simple record of payments and expenses.
• Ask HMRC or Citizens Advice when payments are regular or could affect benefits.

Study payments are not wages

Taking part in an occasional study does not by itself create employment. The tax treatment still depends on the facts and on how HMRC classifies the income. [1]

That matters because the rules that apply to a salary do not apply here. It does not automatically make the money invisible to HMRC.

The usual position for occasional participation

Small and occasional payments can still be taxable depending on their nature, so do not assume that irregular income is automatically exempt. HMRC provides a checker for whether extra income must be reported. [2]

The picture changes if participation starts to look organised and regular, in other words if you are treating it as a source of income rather than an occasional extra. HMRC provides a £1,000 tax-free trading allowance for qualifying gross trading income, with separate rules and exceptions. If relevant gross income exceeds the allowance, you may need to tell HMRC or register for Self Assessment. [3]

Keep a simple record

Whatever your position, keep a list of what you were paid and when. A note in a spreadsheet is enough. It takes minutes and it removes the guesswork if you ever need to answer a question about it. Our guide on how much paid research studies pay in the UK explains typical rates so you can sense check the total.

Benefits and means tested support

This is where people get caught out, and the rules are genuinely different from tax. Income can affect Universal Credit and other means-tested support, with treatment depending on the benefit and the type of income. [4]

If you are on benefits and planning to take part regularly, check before you start rather than after. A short call to your work coach or to a benefits adviser is worth more than any general article, including this one.

Vouchers and non cash rewards

A payment in vouchers is still a payment. Product samples sent to you as part of a study are usually treated as goods you were given for taking part rather than income, but if you are receiving them frequently and at meaningful value, treat them the same way you would treat cash and keep a record.

What FeFe does

FeFe pays participants for completed studies into a balance you can withdraw. We do not deduct tax, because you are not our employee. Your account keeps a record of every payment, which is the record you would need if you ever have to explain the total to anyone.

Not sure whether a study offer is genuine in the first place? Read how to tell if a paid research study is legitimate, or start with the complete guide to getting paid to take part in health research.

References

1. UK Government. Check employment status for tax.
2. HM Revenue & Customs. Check if you need to tell HMRC about additional income.
3. HM Revenue & Customs. Tax-free allowances on property and trading income.
4. UK Government. How your earnings affect Universal Credit payments.