This is a question Active Independence gets asked frequently, by both PAs and employers. There are three main things to think about:
- Tax / HMRC
- Employment Law
On the surface being a self-employed PA seems the easiest option, particularly for the person needing care / support as for them there is simply less paperwork! All they have to do is make a payment to the PA for the hours they have worked (usually recorded on a timesheet).
The PA, however, has the responsibilities that go with being registered as self-employed such as:
- Keep all receipts for any items bought for your work and complete a self assessment return each year
- Pay tax and National Insurance (usually at the lower class 2 level)
- Accept there is no pay whilst your on holiday or sick
- Ensure appropriate cover if you can’t work for any reason
- Have necessary public liability insurance
Strictly speaking either of you can end the agreement with little or no notice. You might not be asked to come back to work one day – maybe because the person doesn’t like you – leaving you with no work. On the other hand, you could simply walk out for whatever reason, leaving the person without care.
2. Tax / HMRC
Put simply, we are all legally obliged to declare any earnings we make in payment for services or goods. If you earn over the tax threshold you must pay tax and National Insurance. If you are employed by someone, this is worked out by your employer or payroll service and taken off your wages.
The HMRC website guidance on whether or not a carer can be self-employed is as follows:
Care provided in client’s home.
The case law tests normally indicate that a care worker who looks after a client in the client’s home is likely to be an employee. In particular there will often be a significant right of control, for example the carer required to arrive at a pre-arranged time and perform tasks at the request of the client. On occasions the facts may indicate self-employment. For example, it may be the case that a care worker looks after a number of people concurrently and has a business organisation in place
The thing to note is that if you are providing care and support for more than one person and provide cover if you are away, it is likely you will need to register with the Care Quality Commission as they will consider you to be a care agency.
3. Employment Law
At an employment tribunal hearing in 2012 between a ‘self-employed’ PA and a disabled person the judge’s ruling was quite interesting.
Although a written contract wasn’t in place he said that a contract was implied and so the PA was in fact employed and therefore covered by employment legislation (Employment Act 1996 Sections 1 & 2). The reason for this is that a PA is not free to come and go as they please. You are needed to be at the person’s house at a certain time and this is usually recorded on a timesheet or logged in a book.
This means for example, that if you are dismissed your employer must follow proper processes. You are also entitled to such things as annual leave, holiday pay, maternity pay etc.
Finally, for all the above reasons, Active Independence strongly recommends that PAs are employed by the person that they provide care and support to. It protects both parties, and helps build a safe and fulfilling working relationship, as your role is properly defined.
We provide lots of support and advice, including template contracts and policies. If you want to learn more about the role of a PA, you can work through our online training course The Role of a Personal Assistant which covers the subject in detail.
Other useful organisations