Fan Mo
Fernanda Bajanca
Quentin Loisel
Conversion between pounds and euros when a MCIF is finishing
Dear members of the MCAA UK chapter,
I will finish a MC individual fellowship in few months. In my fellowship there was something unfortunate: the fellowship was signed before Brexit (March 2016) but took place after it (April 2017-April 2019). For that reason, the pound-to-euro conversion used during the whole contract (1.45, before Brexit) was much higher than the actual conversion rate (around 1.15, after Brexit). As you can gues, this makes a quite a difference. Related to this situation, I have some few questions:
1. With respect to the administration of the funding, how is the conversion to other currencies work? Is the whole money converted at the date of signature, or at the starting date, or is this done on a monthly basis (or other time interval) during the contract?
2. What should happen if, due to conversion issues, there is remaining money at the end of the contract? Is this regulated by the EU, or is this addressed idiosincratically by each institution?
Many thanks!
Fernando
26 Comments
Hi Fernando!
Yeah, you just write an email to the Finance Manager of your department and they should sort this out. You are entitled to the amount of GBP that comes from converting the total grant money in EUR to GBP using the average exchange rate for the 2-year period of the fellowship as computed in the ECB website (BTW there should be a few lines in your contract stating this). In your case, you should have quite some credit. The money will be sent to you as a lump sum, and it's of course taxable. Detailed information on this aspect is available on this very website: https://www.mariecuriealumni.eu/posts/balance-payment-calculations .
Take care!
Giacomo
Thanks a lot Giacomo.
"As a mathematician has explained, the average of inverses is not the inverse of the average." hahaha hilarious!
The European Commission sends the 20% remaining of the grant money to your host institution only after your final report has been accepted. In my case I did not receive the remaining money yet because the report has not been accepted yet.
Hi Fernqndo,
I had the same problem. Due to underpayment during the whole 2 years, I received a large amount of extra money (taxed 40%) after the end of the fellowship.
Andreas
sorry for typing q instead of a, it is the French keyboard...
Hi everyone.
I'm also currently employed in the UK, and the university was clear from the beginning that any difference deriving from the conversion rate would be paid at the end of the fellowship in a lump sum. However, I have just found out that this applies only to the salary, and that losses due to the conversion rate in my research allowance will not be refunded. With the conversion rate they applied (0.78 pound per euro), I have already lost around 1000£ in the first year of my fellowship, as the average exchange rate in 2018 was of 0.89. If it stays this way, and with Brexit it can only get worse, I will loose at least 2000£ from my allowance - money that should be spent on research trips, conferences, training and networking activities. I don't think the EU should accept that.
I have raised the question with the EU office at my university, and they replied that the rate is "managed centrally and unfortunately the budget will not be revised". Did anyone of you experience the same? And do you think that the commission could intervene on this subject matter?
Thank you!
Dear Daniele,
are you sure you got the rates right? "0.78 pound per EURO" can't be correct. The current rate is 1.15 GBP/EUR, tending towards 1.16. It never was below 1.098 during whole 2018. You can expect that in case of Brexit with a deal it will rise further. If we have a no-deal Brexit though, the exchange rate might be our smallest problem...
Anyway, maybe you mixed up the rate and it's 0.78 EUR per GBP, which would be an awesome rate where you actually gain a lot. Something tells me that can't be true either, since the pound wasn't as high as that since before the referendum. If it is really 0.78 EUR/GBP, against all expectations, then I would recommend to not rock the boat too much ;)
Hey Michael,
I meant, of course, an exchange rate of 1 € = 0.79 £. I have started in January 2018, not before Brexit, and the annual average rate for 2018 was of 1 € = 0.89 £ (according to the ECB website). Applied to an allowance of 19200 €, I received 15168 £ instead of 17088, with a loss of 1920 £.
My personal case is not important. The point that I wanted to raise is to know if other alumni who have worked in British institutions had the same issue with the research allowance, for which, unlike the salary, there is no compensation or adjustment due to a wrong esteem of the exchange rate. Again, I don't think this is fair: 2000£ that you could use for example for a conference trip or to invite two more speakers to your research event, just disappear from your grant.
Best, Daniele
Hi Daniele,
Sorry, I was being stupid. 0.78 EUR/GBP is indeed a pretty bad rate. It's quite usual though that institutions apply a "protective rate" in their conversion, ot hedge against any exchange rate uncertainty.
The normal procedure is that at the end of your fellowship the average rate is calculated, and any underpayment will be compensated with your last installment. Doesn't hurt to keep check and get in touch with your HR department near the time.
Your last installment will probably be overtaxed. You can file a tax return at the end of the tax year, and HMRC will send you a checque in the mail for any overpaid taxes.
Hi Michael,
I just received the top-up payment that brings my fellowship to the end... but not the confusion on the finances! :) This lump sum was paid with my monthly salary (I got a new contract after the fellowship ended) and all of it has been taxed at a higher rate (41% in Scotland) than what would correspond to my tax code. This somehow doesn't seem correct... I'll appreciate a bit more information about how these lump sums are taxed and whether I should claim a tax return or wait for HMRC to contact me.
Thank you!
PS: One learns a lot more than expected from a Marie Skłodowska-Curie Fellowship! :)
Hi Aida,
I had this happen to me after I had finished my contract - give your payroll office a shout for the details but it is to do with the way that wages are paid after the end of a job, and how they are taxed by HMRC - HMRC must apply the emergency tax code to the lump sum, regardless of how much you've earned/not that year.
I got my refund automatically when I forwarded my P45 to my new employer, and the refund was in my second or third payslip of the new job. Hopefully yours will be as seamless. It's just HMRC catching up with itself.
Good luck!
Robyn
Same here. At the end of my scholarship I received a lump sum which was taxed at 40%. Because the amount surpasses a certain salary threshold,it gets taxed at a higher rate unlike the monthly payments do.
I didn't file any tax refund claims, but received a tax refund from HMRC automatically after the tax year ended.
Hi all, can I ask if the lump sum gets paid with the last stipend? If not, how long does it take for it to be calculated and paid by the Uni?
Hello,got mine in 2-3 chunks with salary in my last year, but this was because we actively had written to our payroll and asked to pay the lump sum earlier. However, the last lump sum came after the end of the contract in about 3-4 months time. I believe this was some leftover money due to currency conversion they calculated after the grant ended.
Hey Aida,
the others have already chimed in and described how you get the refund automatically with a new employer.
If you don't get it back automatically for some reason you can always file a tax return at the end of the tax year (after April 5). It can be as easy as writing to HMRC and explaining why you think you paid too much tax. If your situation is more difficult you can always find an accountant to do it for you for a reasonable price.
Thanks everyone – all clearer now! :) Perhaps something I should clarify is that my new contract is with the same employer (I was lucky to get a new contract within the same University to finish my research). I may write to our payroll office as Robyn suggests for more details now that the issue is fresh but mostly wait until the end of the tax year to see if HMRC gets in touch...
Thanks again!
Yes, this is what they told me: I will receive a lump sum at the end of the fellowship to compensate the losses caused by the low exchange rate. However, this will ONLY apply for the salary, not for the research allowance, for which there will be NO compensation. This is what I’m complaining about. Should I contact the Commission to see if it’s appropriate to intervene in this subject matter? Has any of you experienced the same?
Hi,
Same here. My exchange rate was 0.65 (yes!) and I received a lump sum three months after my contact ended. This only relates to salary. The difference in exchange rates in research allowance was lost. I couldn't spend it during the fellowship as the amount technically wasn't there, but I couldn't spend anything when the contract ended exactly because it ended. All the research money had to be spent during the contract. Vicious circle and a big gap in the rules.
A.
Hi Daniele,
Regarding the Living Allowance exchange rate of 0.78 and the lump sum - that is what me and other MC fellows are getting too so I will waste no further words on it. That is unfortunately how it goes.
Regarding the Research Allowance - are you the PI of your project? After reading your question I asked a MC Postdoc that I know about how her UK host institute treats the conversion for her research allowance. Turns out that they update it each month, re-calculating a 'projected final allowance' so to speak, and it is that number against which her current expenses are being compared. Since the research allowance isnt being paid for directly but rather a measure against which reimbursement for expenses is being compared, it works out OK that way.
I would advise you to ask the PI of your project since they should be getting these monthly updates from the EU office or whatever department is responsible.
And if your host institute has not given you such a construction, I suggest you would fight for it.
Hello all,
this is indeed a very interesting discussion.
I just double-checked my paperwork with the University and found the following:
"[...] Your exchange rate is set on the month your application was submitted. [...] For personnel costs (Living+Mobility+Family Allowance), a recalculation is done at the end of the project to ensure the Fellow has received the correct payment i.e. total Euros due, if there is a shortfall this will be paid to the individual as soon as possible after the claim is accepted by EC. [...]"
The set-point at application is somewhat arbitrary to me, as the payment is done earliest half a year later when the results are public and you accept the fellowship. But there seems to be a recalculation. There is not a single word on the Research and Training Costs, which is weird... It would be interesting to know what the EU suggest on that.
Best wishes, Anastasia
Hi,
My situation is quite similar to Fernando. The fellowship was signed before Brexit (April 2016) but took place after it. The exchange rate used by my University to converts pounds Sterlings to Euros was 1.25. In my case, the Finance department makes a "finance reconciliation" every 6 months.This reconciliation covers my living, mobility and family allowance.
Bye
Silvia
Hey there,
I have asked the finance team of my University to recalculate the training budget after 12 month since they have used a conservative exchange rate as well. They did. Instead of 14,000 it was possible to spend 16,000. It changed several times and i think they still have not used the correct rate but better than nothing. They do not inform you pro actively about your rights and you are alone with that, depending how that particular University system deals with it. I think the EU should clarify that and make recalculations obligatory, written down in each msca contract.
Best wishes Ralf
I also had this problem when I finished an MSCA to Irleand and I didn't ever resolve it. I hope someone will give advice here for the situation of ending an MSCA IF in the UK.
Thanks a lot for all this feedback.
One question: I should receive this left-over in few weeks. I am still working in the same uni where I did my IF, so I guess this will arrive with my salary. Should I pin Finance dept. and ask something specific (e.g. maybe to be divided in chunks?), or should I just wait, and see what should I do if I get a too high tax?
Secondly, a comment. When I started my fellowship, someone from finance said that maybe we could arrange an adjustment of the conversion rate at the end of the first year (i.e. at the half of the fellowship). However, I asked about this latter and they said it was not possible. Maybe would be good that this issue of adjustment could be defined in the contract, so that then the unis cannot deal with this in an adhoc way. Do everyone agree on this, or I might be missing parts of the picture?
Thanks again!
Hello,
My question is about the average exchange rate applied for an ESR under MSCA ITN fellowship.
The duration of the complete project was 4 years (1st June 2015 - 31st May 2019), while I worked for 3 years (1st Feb 2016 - 31st Jan 2019). So, in this case, what should be the reporting period for taking out the average exchange rate, 4 years or 3 years?
regards
Mayank
Hi Fernando, they will adjust the currency rate at the end of your contract. If the difference is in your favour, your last salary will be higher than usual. If not, the institution runs with the expenses. At the beginning of the fellowship, they didn't use the 1.45 rate, they always use a smaller one to cover possible fluctuations of the currency rates. I think this is written somewhere, take a look at the workplan or other documents (at least this is the way it uses to work 3 years ago).
Cheers