Deciding the status of your personal assistant

More information about tax employment status

It is important that you get the tax employment status of your personal assistant (PA) right so that the correct type of tax and National Insurance is accounted for and collected at the right time. In general we would expect most PAs to be employees, however this page will help you understand what you should consider when deciding the status of your PA and where to get further help if you find it difficult. Remember that their status for employment law may be different.

Who decides the employment status of my PA?
How do I decide if my PA is employed or self-employed?
What if I have more than one PA?
What help is available with the tax employment status?
Keeping records

Who decides the employment status of my PA?

It is your responsibility to decide the tax employment status of your PA.

However, you cannot just pick an employment status because it is better for you or for them or because your PA prefers to be employed or self-employed or vice versa. The correct status depends on the relationship you have with your PA and the wider circumstances of the particular person. It is a matter of fact rather than choice.

The starting point will be the nature of the agreement (whether written or oral) that you have with the PA. However, put simply, employment law and/or tax law can override what either you or your PA intended. This means that even if you have a contract with your PA that says they are self-employed, if the facts indicate otherwise then they could be found to be your employee.

It is therefore important that you apply the criteria listed below when deciding tax employment status. In addition, HM Revenue & Customs (HMRC) can provide help to work out tax employment status as explained below.

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How do I decide if my PA is employed or self-employed?

HMRC say that in most cases it is generally straightforward to decide tax employment status. The general rule is that your PA will be:

  • Employed if they work for you and do not have the risks of running a business
  • Self-employed if they run their own business on their own account and are responsible for the success or failure of that business.

Where it is not so clear cut, HMRC have produced a series of indicators to help. We have summarised these indicators below:

An individual is likely to have a 'contract of service' and so be employed by you if most of the following statements apply to them:

  • you can tell them what work to do, as well as how, where and when to do it
  • they have to do their work themselves
  • you can move the worker from task to task
  • they are contracted to work a set number of hours
  • they get a regular wage or salary, even if there is no work available
  • they have benefits such as paid leave or a pension as part of their contract
  • you pay them overtime pay or bonus payments
  • they manage anyone else who works for you

An individual is likely to have a 'contract for services' and so be self-employed if most of the following statements apply:

  • they can hire someone else to do the work you have given them, or take on helpers at their own expense
  • they can decide what work is done and when, where, or how it is done
  • you pay them an agreed fixed price – it does not depend on how long the job takes to finish
  • they can make a loss or a profit

Even if none of the statements in the previous list applies, your worker is still likely to be self-employed if most of the following apply to them:

  • they use their own money to buy business assets, pay for running costs and so on
  • they are responsible for putting right any unsatisfactory work, at their own expense and in their own time
  • they provide significant tools and equipment that are fundamental for their work

You can find more about indicators of employment and self-employment on GOV.UK.

There are some different rules that apply to certain groups of people such as agency workers and family members. See our exceptions section for more details.

There is no single test to determine employment status. Each case has to be looked at carefully and all of the factors above considered. In general however, we would expect most PAs to be employees. Indeed, HMRC's Employment Status manual says the following: 

‘Care provided in client’s home - The case law tests normally indicate that a careworker who looks after a client in the client’s home is likely to be an employee. In particular there will often be a significant right of control, for example the carer required to arrive at a pre-arranged time and perform tasks at the request of the client. On occasions the facts may indicate self-employment. For example, it may be the case that a careworker looks after a number of people concurrently and has a business organisation in place.’

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What if I have more than one PA?

You must decide the employment status of each PA separately. Just because one assistant is employed, it does not mean they all will be. You should consider the criteria above for each PA you use.

Your PA may have another job. You need to work out their status solely for the work they do for you. A person can be employed and self-employed at the same time. For example, they may be employed by you during the day as a PA but they may teach music as a self-employed person in the evening.

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What help is available with tax employment status?

HMRC can help you determine the tax employment status of your PA.

They offer an online 'check employment status for tax' tool which you can use to help you. It will ask you a set of questions about your situation and at the end it will give you an indication of your PA’s status for tax.

When using the tool, and answering the first question ‘Which of these describes you best?’ we can confirm that as an employer, you should select ‘End client’.  Although the explanation on the tool says that ‘The end client is the public body, corporation or business that the worker is providing services to’ this is also the category to select if you are a individual hiring a worker.

Selecting this means that the tool then goes on to refer to you in the third person as ‘the end client’ for the remainder of the questions (e.g. Can the end client move the worker to a different task or project than they originally agreed to do? rather than ‘Can you move the worker to a different task or project that they originally agreed to) which is a little bit confusing. There is also some quite technical language used in the questions, which can make them difficult to understand.  If you are uncertain at all about what to do or what a question is getting at, then please contact the HMRC employment status customer service team who should be able to help you further. 

(While there is an option of ‘Get help with this page’ at the bottom of each section, please note that completing this will just see an automatic response given that someone will contact you in 2 days and this is unlikely to be a technical tax specialist.)

IMPORTANT NOTE

HMRC say that you should be able to rely on the tool rely on the tool answer as evidence of your PA’s status for tax and National Insurance contributions providing you answered the questions accurately based on the actual terms and conditions under which the person provides their services to you and the tool has been completed by you or your authorised representative.

You should print or save a copy of the enquiry and result screen so that if there are any questions from HMRC at a later date you can show these as evidence that you ran a tax employment status check.

You can also contact the HMRC customer service team to request a written opinion about your situation. Their contact details are on GOV.UK.

Finally, HMRC’s Employment Status manual provides much more detailed guidance about deciding the employment status of individuals.

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Keeping records

You should keep a record of any information or guidance you used, including a note of any telephone calls with the customer service team to make your decision about the tax employment status of your PA(s). This will be helpful if HMRC ask any questions at a later date – see our section on getting employment status wrong for more information on compliance enquiries.

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