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bigduckontax, Accountant
Category: Tax
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I use an agency to supply a full time live-in carer

Customer Question

I use an agency to supply a full time live-in carer for my elderly father. The monthly cost is £4000 - I understand that the carer (who is Polish) only gets £1500 a month, the agency the rest. The carer has suggested that she becomes self employed and I pay her direct. She would only be working for me so does that not make her my employee with all the responsibilities for tax, pension etc?
She seems to think not and says she has friends doing this but I am sure that I have heard that there are regulations concerning self employed status and tax.
Angela Pepper
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, Angela, I am Keith, one of the experts on Juat Answer, and pleased to be able to help you with your question. I see no reason why your carer should not register herself for seld employment with HMRC and invoice you for her services. Here is the HMRC 'Definition of self employment: Someone is probably self-employed and shouldn’t be paid through PAYE if most of the following are true:they’re in business for themselves, are responsible for the success or failure of their business and can make a loss or a profitthey can decide what work they do and when, where or how to do itthey can hire someone else to do the workthey’re responsible for fixing any unsatisfactory work in their own timetheir employer agrees a fixed price for their work - it doesn’t depend on how long the job takes to finishthey use their own money to buy business assets, cover running costs, and provide tools and equipment for their workthey can work for more than one client'The acid test of whether she is a contractor to you is that a comntractor can be told what to do, but not how to do it. However, if you pay your carer less than the NI Lower Earnings Limit you do not need to register for PAYE anyway. I do ho9pe that I have set your mind at rest on this matter.