§ Mrs. Margaret EwingTo ask the Chancellor of the Exchequer if he will list the regulations covering tax liability on YTS earnings with regard to partial refunds of travel or lodging costs necessarily incurred in taking part in YTS.
§ Mr. Norman Lamont[holding answer 23 May 1989]: Payments in respect of costs incurred on travelling and accommodation are only made to YTS trainees who are not employees. These payments are not liable to income tax.
§ Mrs. Margaret EwingTo ask the Chancellor of the Exchequer what guidelines have been issued to employers, sponsors and managing agents on the position of young people on YTS in relation to PAYE and NIC.
§ Mr. Norman Lamont[holding answer 23 May 1989]: No special guidance on the position of young people on YTS who are taken on as employees is needed. Employers apply the same PAYE and NIC rules as for all other employees. However, the YTS allowances are below the tax and NIC thresholds, so that no tax or NIC will be payable if the employee's only income is the basic allowance.
As regards trainees who are not employees, the basic allowance is not taxable. Nor are these trainees taxed on payments to which they are also entitled in respect of travel and accommodation costs. The Training Agency's "Managing Agent's Handbook" advises YTS providers to seek advice from the local tax or DSS office if they propose to make payments over and above the basic allowance.