It is recognised best practice that PPI contributors are remunerated to acknowledge the time they commit and the value they bring to the research process. PPI is dynamic, there is no one typical PPI role or scenario. To determine how to remunerate PPI contributors in a tax and regulation compliant manner, there are a number of factors to consider.
Determining employment status is a core issue. Ireland has two employment categories: employed or self-employed. When PPI scenarios do not fit into either category, determination of tax implications needs to go beyond Revenue categorisation and look at Irish legal tests. The key legal test is called mutuality of obligation. Even though there are other key tests, mutuality of obligation is fundamental. If mutuality of obligation does not exist, then employment does not exist.
Identify the appropriate pathway
Determining employment status is the first step to identifying how to process payment or other remuneration for PPI contributors.
- Where the PPI contributors are employed for their PPI work, follow the standard research funded resourcing or core funded resourcing or hourly paid employee processes as per any other employee of the university.
- If PPI contributors collaborate on a solely voluntary basis, the standard rules for volunteers apply. Travel and subsistence can be paid tax free to volunteers via the non staff expenses form provided the involvement meets the standard Revenue criteria for tax-free reimbursement of volunteer's expenses.
- Some PPI contributors provide paid consultancy services. These contributors are treated in the same manner as any consultant offering services and processed for payment of services via the standard UCD eProcurement system and with adherence to the UCD procedure for the engagement of consultants.
- Many PPI collaborations will not fit into the employee/volunteer/consultant categories and thus do not already have an identified standard route for tax compliant (from a university perspective) remuneration. We have sought guidance on how best remunerate these PPI contributors, outlined in the next section below.
Non-Standard Options for Remuneration
This section outlines the options for remuneration of PPI contributors who are neither volunteers, nor consultants nor employees. It applies when the involvement activities also do not meet the criteria for employee-employer relationship (such as the mutuality of obligation test). Currently, these would be the most common scenarios for PPI in research relationships across UCD.
It is important to note that there is no Revenue approved pathway to remunerate PPI contributors who do not meet the criteria for Revenue categorisation. The below options are based on an expert tax consultation on the topic commissioned by the PPI Ignite Network. The recommendations are suggested based on the lowest risk of challenge (to the university) by Revenue as informed by existing Irish case law.
This information is provided for informational purposes only. The PPI Ignite Network and UCD do not accept duty of care and denies all liability to parties that place reliance on this information. It is not intended to inform individuals of the implications of PPI activities on their own tax, as this varies from individual to individual.
Options for remuneration in these scenarios:
Reimbursement of expenses is recommend this as standard practice. Although PPI contributors in these scenarios are not staff, we recommend the use of UCD staff/civil service reimbursement rates. Expenses can be processed via the UCD non-staff expenses form.
Gratuity via voucher is the preferred option when remunerating beyond receipted expenses, travel or subsistence. The use of vouchers allows tracking of the expenditure from a university perspective. Vouchers can be ordered as hard copy or digital versions via UCD's eProcurement system. Please add "non-staff PPI" in the item description or as a note on eProcurement. There is no limit on the frequency of vouchers given to an individual provided they are not a staff-member. We recommend a maximum limit of €1000 per person per year. As part of your research management, it is important to maintain adequate records of expenditure on vouchers for PPI contributors.
Honorariums are a potentially feasible, however they tend to be labour intensive to process and not recommended for the routine remuneration of non-staff PPI contributors. There are standard regulations related to the use of an honorarium, including it being subject to 48% tax and that recipients are not entitled to receive expenses. If you do decide to use this method, follow your School or Unit's standard procedure for the use of honorariums.
Round sum cash payments are not a straightforward means of remuneration from a tax perspective. The university is responsible to ensure tax compliance of research expenditure for the whole institution. The use of cash sum payments is very difficult to operationalise in a compliant manner at scale. We do not recommend its use. Furthermore, use of round sum payments burdens the recipient (the PPI contributor) with the requirement of demonstrating to Revenue that the amount received offset expenses incurred by them in terms of their contribution.
Considerations when managing PPI remuneration
- It is important to always be transparent about remuneration for PPI in research up front. Be clear about the process and timeline for remuneration and share this with PPI contributors.
- It is good practice to give people the option to refuse remuneration. People may wish to refuse for a number of reasons such as impact on their personal tax affairs or social welfare benefits.
- It is important to remember that when remuneration is not being subject to tax at source, it does not mean that Revenue will not consider it to be taxable in the hands of the PPI contributor. This depends on an each individual's circumstances and there may still be a requirement for the individual recipient to disclose the amounts on their income tax return. You should highlight this to PPI contributors but be careful not to give individual tax advice to people unless you have the expertise, accreditation and insurance to do so.
- You should be aware that any means tested social welfare benefit could potentially be impacted by remuneration for PPI. This varies by context depending on an individuals circumstances and the benefit they are receiving. You should highlight this to your PPI partners and collaborators.
Useful resources to share with PPI contributors
- The Department of social welfare have an (anonymous) tool for disability and illness benefits that helps people to estimate the impact of working on their benefits.
- Citizens Information has guidance on voluntary work and social welfare payments
- Citizens Information has guidance on social welfare payments and work