EIM61500 - Tax treatment of engineering employees: holiday pay and training schemes
Holiday pay
Under the holiday credits scheme in the engineering and allied trades, the employer pays weekly sums to trustees on account of the credit. The credit does not become the property of the employee until it is paid out to him or her at holiday times and, in these circumstances, tax should be deducted when the credit is paid out and not week by week.
Training schemes
The Engineering Construction Industry Training Board (ECITB) operates various training schemes. The principal on-going scheme is the National Apprenticeship Scheme for Engineering Construction (NASEC) which provides young persons with a programme of training and work experience lasting for up to four years.
Participants in NASEC, and in other shorter-term ECITB schemes, are regarded as trainees engaged under contracts of training and not as employees. The allowances paid to them by the ECITB are therefore not taxable earnings but training allowances that are not chargeable to tax.
As regards scholarships and awards generally, see EIM06205 onwards.