This is my first post and I have tried to search the forum to figure out whether similar issues had arisen in the past. I was, however, unsuccessful.
My situation is as follows (and it is rather complex): I am a national of a EU country who is currently a PhD student at a UK university on a funding scheme from yet another country. (I also receive a small UK grant, but that's about 1.5k)
The way it works is this: the money is paid out by a foundation to the foreign university that funds me, which in turn employs me (technically) as a research fellow on a contract that requires me to do some research work in a larger research project. The connection between what I do as a PhD candidate and in my research work for them is significant. The contract also states that the money is predominantly meant to support my studies, and only tangentially to carry out research work. As it normally happens for this type of funding schemes in that foreign country, I pay tax there, plus the equivalent of national insurance. The reason these funding schemes work this way is that they still allow for retirement contributions and so on. Compared to UK PhD scholarships, it is a rather generous funding scheme. On the flipside, my social security contributions have to be taken at source and paid in the other country (it would be much cheaper to do so in the UK), I have to pay compulsory health insurance there (ditto), and I have to pay my own university fees here. I also have to be paid on a foreign bank account, which is annoying as a non-resident.
When I arrived in the UK to commence my PhD I immediately received a letter from HMRC. I immediately called back and I disclosed everything. I was told not to worry, that I did not have to file a tax return, and to notify them if the situation changed. Fun fact, I was also told to apply for a council tax exemption which I, being the nice person that I was, did not think could apply to me. We discussed DTAs and I seem to remember that we discussed one specific provision, which reads:
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Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned Contracting State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that first-mentioned State, provided that such payments arise from sources outside that State.We also discussed the fact that I could in principle deduct my university fees, since my grant literally requires me to be a PhD candidate whilst I carry out research work for the foreign university. Accordingly, the 'wholly and exclusively' test should be met. In any event, I thought nothing of it and just went on to live my life.
Now, during the last year I have also done some work for the University where I am a PhD student. I have not made more than 3k gross, which the university assures me is reported automatically and does not require me to file a return. However, I wonder if my situation, which, at the end of the day, involves three sovereign states, different tax years, and all sorts of weird stuff, requires some additional attention on my part. I was told by the tax authorities that my PhD funding scheme should not be taxable: but I wonder if income produced in the UK could change the situation to some extent.
Probably I should just contact HMRC, but it would any advice would be greatly appreciated.
