The Resolver Guide to Tax Rebates for NHS Workers  

5 min read
November 15, 2023

For many of those working in the NHS it can feel like non-stop financial hardship. Yet, there are some important forms of financial relief for NHS workers that have been overlooked. 

If you participated in the Widening Access Training (WAT) scheme anytime from 1999 onwards, you could be one of the thousands of NHS workers entitled to a tax and National Insurance (NI) rebate. 

In this article we explain how the scheme works and how you can make a rebate claim to HMRC. 

What is the Widening Access Training scheme?

The ‘Widening Access Training’ (WAT) is a scheme that has been offered to NHS employees to encourage them to expand their expertise and improve their practice. 

NHS staff of any kind, from doctors, nurses, paramedics and psychologists, to health visitors, physiotherapists and midwives, can attend a degree-level training course, often including a work placement, to achieve a professional qualification and develop their career. 

Since 1999, thousands of NHS workers have participated in the WAT scheme. The conditions of the scheme specify that workers would be given some National Insurance and Tax exemptions during the period of their training. Despite this, payments they got while training were taxed as if this was paid work rather than a training scholarship.  

This means that the trainees who paid tax or NI during their training period can claim back what is essentially an overpayment from HMRC.

How do I know if I’m eligible? 

Anyone who participated in the WAT scheme can apply. However, there are different criteria which correspond to two main types of claimants: those who were an NHS employee while doing the training and those who were moved to a ‘contract of training’ for the duration of the course. 

(If you aren’t sure which you were, try and remember whether or not you were paying into an NHS pension scheme at the time. If the answer is yes, then you would be an NHS employee. If not, then you were almost certainly on a ‘contract of training’.)

NHS Employee eligibility criteria:

If you were an NHS employee on a WATs scheme, there is a specific set of criteria you must meet to be eligible for a tax rebate:

  • Type of course. The course must have been full time and lasted at least one academic year (1st September-31st August).
  • Institution. The course should have been administered by a recognised university or college. 
  • Attendance. Your attendance was at least 20 weeks during the academic year.
  • Income. The rules indicate that if you earned over a certain threshold (see the table below) HMRC may look at your claim in more detail to make sure your income was a scholarship according to its Employment Income Manual
Date WAT course started
National Insurance
1999  – 31st August 2005 No exemption £7,000
1st September 2005 – 31 August 2007 £15,000 £15,000
1st September 2007 – present day £15,480 £15,480

HMRC defines your income during training as a ‘scholarship’ and that is the only amount that is eligible for NI and tax rebates. So any extra earnings from part-time work are not included in the exemption.

‘Contracts of Training’ eligibility criteria:

Some NHS staff were suspended from their regular employment contract for the duration of the WAT scheme and put onto a ‘contract of training’ instead. The majority of these contracts included clauses that meant you did not have to pay NI or tax in this income. So if you did, then you should be able to claim back the full amount.

In these cases, decisions are made on an individual basis. The rules are different from those for employees: there’s no specific threshold over which tax and NI suddenly becomes payable. This means that once you submit a claim the terms of your contract will be examined carefully by HMRC to determine the validity of your claim. In other words, a refund or exemption isn’t guaranteed.

Potential problems? 

In some rare instances there is the possibility that submitting a claim could have an adverse effect on your state pension and/or on received tax credit payments.

State Pension

To get your full state pension, you have to have worked the correct ‘qualifying years.’  It’s highly unlikely that one year of training will have a negative impact. If it did, HMRC will probably allow you to ‘offset’ this amount using a portion of your refund. However, it is worth taking this into consideration before making a claim. 

Working Tax Credits

If you were paid working tax credits while on the WAT scheme, you could be asked to repay them because you were not considered ‘working’, but ‘training’. Any repayment would likely amount to less than the total NI and tax rebate, but there is a very slim possibility that you could end up owing back more in working tax credits than you receive as a rebate.

How to make a WAT claim

HMRC states that your payroll department should submit a claim on your behalf. So the first step if you’re thinking about making a rebate claim is to ask your payroll department if they have already done this for you on your behalf.

You can also call one of HMRC’s two separate helpline numbers for tax and National Insurance questions. 

National Insurance helpline: 0300 200 3500 
Tax helpline: 0300 200 3300

You’ll need to clarify your contract status as either an employee or ‘contract of training’. Then you’ll need to state your desire to reclaim the tax and National Insurance payments that you made while on the WAT scheme.  

You can find out more about the claims process on HMRC’s WAT scheme refund page. 

Is it worth the hassle?

MoneySavingExpert have reported that the highest sum awarded to an individual, to date, as a rebate on tax and NI overpayment is £13,500. This was claimed by a psychologist and claimed for tax and National Insurance he paid whilst doing clinical training over the course of three years. 

So while making a claim and chasing up HMRC will take some patience and perseverance it can be very financially worthwhile. 

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