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bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I am in full time employment. My mother is disable and I receive

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I am in full time employment. My mother is disable and I receive some income to care for her. (Very small amount £50 per month).

Do I need to set up as Self employed? If so, what taxes do I need to pay? How much do I need to pay?

How do I compete a self assessment? Am I except from taxing on such a small amount?
Hello, I'm Keith and happy to help you with your question.

To enable me to reply fully please tell me which benefit you receive?
Customer: replied 4 years ago.

I do not receive any benefit. I am employed full time.

Sorry to be a trifle obtuse, but you say in your question that you receive about 50 quid a month to help care for her. Where does this money come from and if it is a benefit which benefit is it?
Customer: replied 4 years ago.

Oh sorry, I see what you mean, No it's my mother, she receives a ILF (Independent Living Fund) award as well as Direct Payments from the council. She is allowed to employ personal carers to help her cook, clean dress, gardening and taking her out etc...


 


She has asked me to help with the gardening and to take her out. She will be paying me £50 per month. I need to know if I need to set myself up as self employed and pay taxes.


 


 


How much will I need to pay? Is there a tax exception for self employed careers?

That is correct, it's what the allowance is intended, amongst other things. It is certainly taxable in your hands.

If you are going to have expenses to offset your mother's payments then perhaps the self employment route might be the answer. However, the sum involved is relatively small and it's an awful palava. I would be inclined to declare it in the 'Any Other Income' box of your SA return and then HMRC can adjust your code number to collect the tax due through your employment PAYE. I suggest you make a note in the box provided at the end of the SA form to tell HMRC what is going on. They may be well content with such an arrangement. It's a rough and ready twist of the spoon to stop the treacle running off, so to speak!

If you have already made your return for 12/13 then write to your tax office and ask what they advise. They could well adjust your code number immediately to assist in recovery.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 5241
Experience: FCCA FCMA CGMA ACIS
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Thank you for your support.

I am afraid the information you have been provided with is incorrect - as some.all the payment comes form Direct Payment that your mother received from the local authorities, she in fact has to engage you as an employee. You certainly cannot have this treated as self employment and to add this in as OTHER INCOME is not considering the correct legislation against the payment and the way in which they are - and for the purposes they are made.

 

That means your mother (or you on hr behalf) have to operate PAYE - so basic rate tax on these payment as all your allowances are being utilised against your main employment operate many of these schemes for Direct Payment clients -

 

And its imperative that its PAYE under the employment status legislation. So you should contact HMRC are ask for an Employer scheme to be set up - and there will only be tax due and not National Insurance (as its below the National Insurance limit)

My advise comes from 26 years of working.pratising and educationg on PAUE (amongst other tax regimes)

 

Link here to contact HMRC to set up a PAYE schemehttp://www.hmrc.gov.uk/payerti/getting-started/register.htm

 

Let me know if you have any concerns -

 

ThanksSam

This expert's information is misleading. To suggest that carers' payments be the subject of individual PAYE systems operated by disabled an often elderly persons is ludicrous to a degree. It would also result in a proliferation of PAYE accounts to an unsupportable extent. I suggest that your mother should check it out with her tax office for the best way to proceed.
Hi

The legislation to support the fact that PAYE does apply

http://www.hmrc.gov.uk/manuals/pommanual/paye23010.htm

Which states
here are an increasing number of people who need a carer to assist them because of a disability or simply getting older. Some of these people receive funding for the provision of care.

One source of funding is by virtue of The Community Care (Direct Payments) Act 1996. This enables local authorities to make direct cash payments to individuals who are assessed as being in need of care. This, in turn, enables people who need care to arrange and pay for the relevant care services themselves. Another source of funding is the Independent Living Fund which is a Government financed charitable trust set up to give financial assistance to disabled people to enable them to live independently.

People who receive funding may employ care workers or pay an agency to provide care services. Where they pay an agency to provide care services they will not normally need to operate PAYE and account for NIC in respect of the carer(s) supplied by the agency.

You are not employed by an agency - but directly by your mother - so PAYE must be operated.

So although my colleague feels its ludicrous - sadly its the law - and that is what we all have to adhere to

Thanks

Sam