Once you have made the decision that taking on a personal assistant (paid carer) is right for you and your needs, there are a few important tax issues that you must think about. Whether you use your own money to pay for your personal assistant, or use money given to you through a Government scheme such as social care direct payments, personal health budgets or Access to Work, the same rules will apply. This is because you may become an employer when you take on your personal assistant and as a result you will have a number of new responsibilities.
- Firstly you will need to decide whether your personal assistant is employed or self-employed for tax purposes. You can find out more in our tax employment status section.
If your personal assistant will be your employee, you will need to think about the following:
- Paying your personal assistant as an employee – You may need to deduct tax and National Insurance from their wages and pay the money over to HM Revenue and Customs (HMRC). You can find out more in our paying wages section.
- Employment law – Being an employer means you will have to think about employment law issues such as contracts of employment, holiday pay, sick pay and health and safety. You can find out more in our employment law section.
The thought of becoming an employer might be daunting. This website is dedicated to providing information and guidance about each of the areas above to ensure that you understand your responsibilities.
Other options when taking on a personal assistant
You have other choices when taking on a personal assistant if you do not wish to be in control of everything yourself.
Local social services department
Your local council may be able to provide one of their own staff to be your personal assistant and help you with your social and care needs or they may commission the service from a private provider. If you go down this route, you will not have any responsibilities as an employer because the personal assistant will be employed by your local council or the private provider.
You can find the details of your local council by following the link on GOV.UK.
You may ask a local care agency to find you a suitable personal assistant. If you take on a personal assistant through an agency, the agency will be the employer and will be responsible for many things such as deducting tax and National Insurance contributions.
However the rates may vary between agencies and may appear higher than employing someone directly as the agency will be responsible for all underlying employment costs such as holiday pay and sick pay. If you receive social care direct payments, personal health budgets or Access to Work payments you may be able to get extra money to cover these costs.
Find out more about using an agency, including some things to be wary of, in our section on agency workers.
Become an employer, but use a payroll provider to help with your tax and National Insurance obligations
‘Payroll’ services often have a charge attached to them, but if you receive social care direct payments, personal health budgets or Access to Work payments you may be able to get extra money to cover these costs.