Why employing a carer can put you on the wrong side of the HMRC

Why employing a carer can put you on the wrong side of the HMRC

Take on a carer to look after yourself or a loved one and you could find yourself liable for their sick pay, maternity pay, redundancy and holiday pay… and shortly their pension too. Get it wrong and you could be fined. Now a new service has been launched to help families cut through the red tape.  

More and more older people are choosing to be looked after in their own home by a carer and discovering that it can prove a far more taxing experience than they bargained for, because in doing so, they have officially made themselves an employer… with all the red tape that involves.

“Being cared for in one’s own home is a great option for many of us in our later years,” says Deborah Stone, MD of the leading advice website for people with older relatives, www.myageingparent.com. “It allows you to retain your independence, as well as stay within your social circle and support network and avoid the often upsetting experience of moving into a care home. But it’s not something you should do without checking out your responsibilities first. There seems to be a general misconception that carers working in a private home can be self-employed. In most cases, carers should be treated as employees.

“Moreover, employing a permanent or live-in carer brings with it the same obligations as for any business taking on an employee. By law, therefore, in most cases, an employer will need to account for PAYE and National Insurance Contributions on the salary paid to a carer. Get it wrong and you will find yourself on the wrong side of the HMRC – which is not a great place to be if you are a vulnerable older person or a family member who is struggling just to keep their loved one cared for. Older and disabled people also acquire employer status when using the Direct Payments or Personal Budgets they have received from Social Services to take on someone to help with their daily needs such as cooking, washing, dressing, driving and so on.

“This really does impact upon hundreds of thousands of people – most of whom simply want a helping hand… not to have more work created for them.”

Under HMRC rules, every employer who pays an employee £112 per week or more has to calculate PAYE and submit the information online at the same time as the Employee gets paid. It is called Real Time Information (RTI).  Failure to do so will result in the Employer being fined by HMRC. In addition there are other aspects to take into account, such as sick pay, maternity pay, redundancy and holiday pay.

“And all this,” adds Deborah, “is before the next hurdle for those receiving care: contributing towards their carer’s pension. The threshold for the size of business involved is steadily reducing, and by April 2017 it will embrace all employers with qualifying employees.”

So what can those receiving care or their families do in order to avoid the hassle?

“In response to all the very worried emails and telephone calls we’ve received from our website users,” says Deborah, “myageingparent has partnered with Taxing Carers to provide a service to manage PAYE and National Insurance for carers with minimal hassle. It is a service geared specifically to the very specialist needs of those receiving care, so Taxing Carers have a long track record in dealing with these issues and understand precisely all the responsibilities, and so will keep costs down to a minimum.”

You can find out more about the new service HERE.

For more details, please contact Deborah Stone on 07768 876871, or by email deborah@myageingparent.com

This month you can Win a Kindle by visiting our website here