Lakshya raj khatri
Eugenio Pescimoro
PROLOY TARAN DAS
Mobility allowance by receipts and then the rest taxed?
Mobility allowance by receipts and then the rest taxed?
Dear MC fellows,
as we discussed in several other posts, in many countries we receive the mobility allowance taxed, while it is meant to be tax free by the European Commission. So far, I receive it taxed here in the UK.
My host institution recently offered me that I could get the mobility allowance tax-free as reimbursement of receipts. I read in this forum that also other people received this offer. However this would be a problem for the host institution, since they must pay to us the WHOLE mobility allowance.
On page 5 of Annex III to my Grant Agreement it says that the payment arrangements must provide "for payment of the full amounts allocated for the benefit of the researcher".
This is a problem for them, but might be interesting for us. :-) Infact, if we get some mobility allowance untaxed by means of receipts and the rest taxed we would pay less taxes on it.
My grant agreement states the following:
"Monthly Mobility Allowance: flat rate allowance to cover expenses linked to the personal household, relocation and travel expenses of the researcher and her/his family in the host country".
I asked my host institution which receipts can be refundable and they said only travel. Household (i.e. rent or other housing expenses) would not be refundable. Now they want to back up from their offer to do the mobility allowance on receipt: it would be too much work for them, they prefer me to get it taxed and basta. My supervisor wrote to them asking a list of the expenses which can be receipted, so that I can better decide what do, and they did not answer.
Tomorrow I should be called back from someone from the tax office in the UK (Her Majesty Revenue and Custom, HMRC). Today he told me that he thinks the mobility allowance should not be taxed, he is going to investigate the issue better tomorrow. Let's see what will happen...
In any case, did anyone of you get the mobility allowance by receipts? In case the receipts did not cover the whole allowance, did you get the rest taxed with your salary? Did you get it at the end of the project? This would not be convenient, since if you get a large sum alltogether you have to pay more taxes on it. However the Grant Agreement requires a "Monthly" mobility allowance.
All this absurd problems could be avoided if the mobility allowance would be just untaxed, as I received it in my previous MC IEF in Germany.
Looking forward to hear your feedback and experiences.
Ciao,
Maria Paola
7 Comments
Dear Maria and Helen,
thanks a lot for pointing out this important point regarding the allowances.
What could help is to contact your National Contact Point.
Select the country in which your program is based and then choose "Marie Skłodowska-Curie".
Let me know how it goes and feel free to send me a personal message if you have more detailed questions.
Greetings, Richard
Hi Richard,
It is true... but regardless of EU rules stating that “where national taxation allows it, the intention is that these amounts [ie the mobility allowance] should not be subject to personal taxation or employer’s deductions.” it is ultimately subjected to national taxation... and National Contact Points stick to that -at least in Croatia, Germany and Holland.
It needs to go beyond this... as Maria is trying to do. Thanks again!
Best
My mobility allowance is not taxed, but the social welfare fund payment is deducted.
Apparently, the deduction has been calculated on the top of the mobility allowance so that the fellows receive the full amount.
Hi, must both academia and private sector (eg. company) pay the monthly mobility directly to the researcher? For example, for a Marie Curie ITN, is a company obligated to give the researcher the 800 euros (for an ER) monthy for mobility as part of the salary, or is it optional (and only used when the fellow travels?)? I'm especially curious to know this for Germany and UK! Thanks!
Hello,
I am a MSC fellow in UK. As still new to the system, I am trying to undrstand things here. So the fellow gets living, mobiliy & family (in some cases) allowance. From this total salary the national insurance and tax is deducted? Also can I use the mobility to participate in conferences?
To answer Swati's question on the mobility allowance:
Your living and mobility allowance constitute your salary. The amount of your living allowance depends on your research experience (< 4 years, 4-10 years, or > 10 years) and on your host country (there is a country correction coefficient: 1.203 for UK for the Horizon 2020 MSCA 2014-2015). This is the main part of your salary. The mobility allowance is aimed to cover expenses linked to your personal household, relocation and travel expenses, such as finding and renting an appartpent/house in the UK, buying furniture, clothes, visiting family and friends back home. You have to deduct compulsory social security contributions from the living allowance and pay income taxes on the resulting net amount. In most cases you end up with about 50-55% of the initial amount.
Normally the mobility (and family) allowance should not be taxed, but there is no uniform regulation on this subject. The MSCA financial guidelines state only that "The mobility and family allowances are fixed amounts, regardless of the country of recruitment, and may be taxable depending on the country in question." In practice, this also depends on how good is your host institution at writing your employment contract and organizing the transfers of your living and mobility allowances. If the employment contract makes no distinction between the two and mentions only the overall amount of your salary (living + mobility allowances), there are big chances that you'll pay an income tax on both. I know that there has been different treatment for MSCA fellows with identical fellowships in Germany, but at different host institutions. Ask your host institution (if it's a large university regularly hosting MSCA fellows it might help you) and the UK National Contact Point for MSCA (https://www.ukro.ac.uk/mariecurie) on this issue.
You have an additional budget for "Contribution to the research / training /transfer of knowledge programme expenses" (under FP7) or "Research, training and networking costs" (under Horizon 2020). This is the budget to use for attending conferences and other research-related activities (e.g. participate to a summer school, purchase books, a laptop, or any research-related equipment that your host organisation cannot provide you with, invite co-authors to your host institutions, visit other researchers, etc.). Under FP7 you had full controll of this budget; the researcher was the one to decide how to spend this part of the fellowship, subscribing to the REA guidelines. You should check if this is still the case under Horizon 2020.
There is an additional "Contribution to overheads (indirect costs)" (under FP7) or "Management and indirect costs" (under Horizon 2020) that are paid directly to your host institution. These are ment to cover all indirect costs related to your project supported by the host institution, such as rent, electricity, heating for your office, providing you with a desk, PC, software, office supplies, access to a lab, library, internet connection, access to scientific material, support from a secretary etc.
You can find more details and specific examples on:
http://ec.europa.eu/research/participants/portal/doc/call/h2020/h2020-msca-if-2014/1600147-guide_for_applicants_if_2014_en.pdf
The Euraxecc web site might also be helpfull:
http://www.britishcouncil.org/new/euraxess/
http://www.britishcouncil.org/new/Global/Euraxess/The-guide-for-international-researchers-moving-to-the-UK.pdf
P.S. The are special provisions and different budgets if you have a type B fellowship (no employement contract with your host institution).
Dear Maria Paola
I am a MC research fellow in Germany and my mobility allowance is paid monthly with my salary and it is taxed. I am on a COFUND fellowship and it may be that it is different as it is jointly funded by MC and my host university. It is stated in my fellowship guidelines (given to me by my host university...) that it will be taxed. My monthly research allowance, on the other hand, is not taxed.
Please keep us posted in case you succeed in getting a tax rebate!
Best wishes
Helen