Types of employment status
The difference between being employed and self-employed
For tax purposes there are only two types of employment status – employed and self-employed. This section explains the differences between the two. There are some exceptions to the normal rules of employment status – see our employment status exceptions section for more information.
A person who is employed operates under a ‘contract of service’. If your personal assistant (PA) has employed status, you will be their employer and they will be your employee. You will most likely have a contract of employment with them and you will have control over what they do and when they do it.
If you are an employer, it means that by law you are required to collect tax and National Insurance from your PA's wages, if they are due, and pay this over to HM Revenue & Customs (HMRC). See our setting things up section for information on how to do this as an employer (or how to use a payroll provider to help you). You may also have to pay employer's Class 1 (secondary) National Insurance contributions.
In addition to tax and National Insurance responsibilities, you will also need to understand employment law issues for your employee.
People who are self-employed are often described as ‘working for themselves’. They operate under a ‘contract for services’ and will often provide services to you as well as other people. Self-employed people are responsible for paying their own tax and National Insurance to HMRC. They will normally give you an invoice for their services weekly or monthly, which you then pay.
You will not have the same employment law obligations if your PA is self-employed. However, they may have some rights depending on their employment law status. See our employment law status section for more information.
Have a look at the next section to help you decide the status of your PA.