Once you have made the decision that taking on a personal assistant (PA) 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 PA, 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 PA and as a result you will have a number of new responsibilities.
- Firstly you will need to decide whether your PA is employed or self-employed for tax purposes. You can find out more in our tax employment status section. This is not the same as their status for employment law, which may be different.
If your PA will be your employee, you will need to think about the following:
- Paying your PA as an employee – You may need to deduct tax and National Insurance from their wages and pay the money over to HM Revenue & Customs (HMRC). You can find out more in our setting things up 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 PA
You have other choices when taking on a PA 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 PA 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 PA 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 PA. If you take on a PA through an agency, and the agency is not just an ‘introductory’ agency, the agency will be the employer and will be responsible for many things including deducting tax and National Insurance contributions.
However, the rates charged by the agencies may vary and may appear higher than employing someone directly. This is because the agency will be responsible for all underlying employment costs such as holiday pay and sick pay and so they factor this into the rates they charge to the users of their services. 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.
One advantage of using an agency is that they will be able to provide cover if your PA is off sick or taking a holiday. The disadvantage is that you may be sent different staff rather than building a relationship with just one person. You should discuss this with any agency you are thinking of using.
Finding a PA that is right for you is extremely important. If you would like to use an agency to help you, the Care Quality Commission and the United Kingdom Home Care Association may be useful to you as they can give you some information on what to look for when looking for an agency to supply your PA.
Their websites allow you to search for home care agencies in your local area and contain inspection reports on individual home care agencies.
Find out more about using an agency, including some things to be wary of, in our section on employment status exceptions.
Become an employer, but use a payroll provider to help with your tax and National Insurance obligations
This arrangement helps you maintain control, but means you do not need to worry about running a payroll or calculating tax and NIC etc., as a third party will do it for you.
‘Payroll’ services will almost always 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 the additional payroll costs. Find out more about using a payroll provider in our section on setting things up.
Skills for Care have also developed a useful guide Understanding the employment status of PAs, which explains about other ways in which you can engage a PA and where to go to find more information and advice.