Any questions? Direct Payments

I’ve started to receive direct payments and have taken on a PA, but I don’t understand what I need to do for HMRC, so haven’t done anything. Please can you help?

We regularly receive queries via our website. We do not give advice, but we try to signpost sources of further information and support. Some of the replies might be useful to others, so occasionally we will post them anonymously as ‘question and answer’ news items. We have received a question recently on what to do if you haven’t done anything with regards to your PA’s pay and taxes since taking them on.

Please note – this is posted as a ‘news’ item, which means the information and links are not reviewed and updated. You should not rely on it without checking the full facts of your case with HMRC or a tax adviser.

Question: I am a disabled person who suffers from dyspraxia. I have just found out that I need to have registered as an employer to be able to pay tax etc for my PA. As fast as I am reading information is just disappearing from my brain and I feel like I'm going in circles but am not getting anywhere. Please help me. Are there any companies that support disabled people who are employers with the registration process with the HMRC? I am on direct payments and I haven’t done anything as I assumed that another body would be doing all this for me.

Answer: We are a small charity with limited resources and I’m afraid we do not offer an advice service as such, however to be helpful we have provided some general information, which should help answer your query.

The first thing to say is that direct payments are not compulsory and if you would rather the local council (or other part of Government paying your direct payment) arrange your care and support directly, they should do so.

As such, your first port of call should be your direct payments team for an honest discussion about your situation, including whether or not direct payments are the most suitable arrangement for you going forward.

They should also be able to advise you where you can get immediate help to deal with your PA’s pay and tax problem and put right the past irregularities with HMRC. This may be via in-house payroll support service, or a local payroll provider that they have outsourced their support to.  Any reputable payroll technician should be able to help you register as an employer with HMRC and process your payroll/pay what you owe on a backdated basis.

You will also need to ask for help in ensuring you have complied with other legal requirements such as checking your PA has a legal right to work in the UK and applying for a DBS check (criminal record check) if one is needed. You are also likely to need employer’s liability insurance. Your direct payments team (or supporting organisation) should help you with all of these things.

You should therefore speak to your direct payments team about what kind of help there is and how to access it, without delay. There may also be other services that can help support you in your day to day living more generally, that they can put you in touch with. 

If your direct payments team really can’t point you in the right direction of someone to help you sort things out with HMRC, you could use the Association of Taxation Technician’s ‘find a technician’ tool. Click the button ‘I am looking for tax advice’ and then select ‘Payroll’ as the specialism. You should make sure that the direct payment provider is aware of the cost of the work required by the specialist adviser, as there is an argument that they should cover this in the money they pay you.

If you don’t get the help you need from the direct payments team, you may want to contact the Disability Rights UK helpline who can offer information and advice on direct payments generally and perhaps can help you understand what the provider of your direct payments should be doing and other avenues of help open to you.

Once your ‘employer’ affairs are in order and up to date, if you feel you would like to keep maximum control and independence by continuing to receive direct payments but don’t want to manage the payroll process yourself, you could continue to use a payroll provider to help you pay your PA. On the other hand, if your PA’s pay situation is pretty straightforward and you like a challenge or want to save some money, you may feel able to try and tackle the payroll process yourself.

Our website can help you do this. If you are interested in exploring this option further, we suggest you start with our helpful first steps guide ‘Taking on a personal assistant – a basic guide’.

I hope this has been helpful. Please let me know if you have any further questions.