We asked UK accountant, Nicola Shoults, for the key things families employing caregivers really need to know:
1. Self-employed caregivers
If a care provider is self-employed this means they do not have an employer, but actually work for themselves. Families are employing the care provider’s service, so are not necessarily required to register as the “employer”, but this is advisable when handling any tax declarations.
Families will not be able to verify if someone has registered with HMRC as self-employed. This is not something that will affect the person using the services, but will only affect the recipient, as they would need to declare the income in order to ensure tax contributions are correct.
For carer roles that involve looking after children, DBS checks may be required.
2. Tax declarations
As the employer of a care giver you would only declare on your tax return expenses that are wholly and exclusively necessary for the course of your business. If the care services you are paying for fit within this bracket then this would be included as an expense. It is advisable to consult with an accounting professional if you think this might be the case.
3. HMRC payroll reports
You will not need to do this if you are using the services of a self-employed person. If however you decide to take on employees (more than one care provider at one time) you will need to register as a company and inform HMRC that you will need a PAYE facility. If this is the case it would be advisable to talk to an accounting professional to see you through this.
4. Optional expenses
As you are employing the services of a self-employed person you are not obliged to cover any expenses, but it might be that in some circumstances you may wish to. When setting up a work contract with a care giver be sure to discuss with them whether you are willing to cover any of their expenses.
5. Receiving benefits
If you are receiving any benefits, tax credits, childcare vouchers or similar, then you should check with the issuer to ensure they can be used through this site and if they have any requirements that must be satisfied.
Nicola Shoults is a qualified accountant and independent tax specialist, with over 10 years’ of experience working in various UK-based organisations.
The information contained in the above article is general in nature, does not take into account your personal situation and should not be relied upon in place of appropriate professional advice. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a tax accountant.
