So, you’ve reached that point. It’s time to bring in some extra help so that you or a loved one can keep living independently. This can be a bewildering and emotional period, with lots to think about all at once. It can be tough to know where to begin.
Your first step is a needs assessment to establish what help is required. Your local council might then send caregivers to support you in your home. Alternatively, it might provide you with funding so that you can arrange this yourself. Local authority support is means-tested, so you are expected to contribute to the cost (finances permitting).
Using local authority caregivers is straightforward, in that you are not their employer and don’t need to worry about recruitment or who’s paying their taxes. However, not everyone meets the eligibility criteria, and many people decide they need more hours than their council can offer. That is where private care comes in.
There are many benefits to hiring a private caregiver. You choose who you want to appoint, and you see the same person or small team regularly, building trust and familiarity. It puts you in control. But many of us have gone through life without ever employing anyone, and it can feel like a daunting new responsibility.
Having the facts at your fingertips helps you take charge of the situation. We explain what your responsibilities are and hopefully dispel a few myths along the way.
So am I an employer now?
That’s not as simple a question as you might think! It’s crucial to properly verify your caregiver’s employment status. Will they work for you independently as a self-employed contractor, or will they be classed as an employee?
This isn’t something that you can just agree between yourselves, and the answer may not always be obvious. HMRC applies a number of tests to determine someone’s employment status. Use the online Check Employment Status for Tax (CEST) tool or speak to someone at HMRC if you are in any doubt. You can also read the official guidance specific to care workers.
Never take anyone else’s word for it that a caregiver has self-employed status.
Possible scenarios
- A caregiver of your choice who works for you in your home should in most cases be classed as an employee.
- It is possible that they could be a self-employed contractor, particularly if they care for lots of different people and are structured as a business. In this case, you will just need to pay their invoices; it’s their responsibility to sort out their own taxes and national insurance (NI).
- A home care agency that sends caregivers to you will handle payroll, taxes, and insurance, as well as carrying out DBS checks (PVG checks in Scotland). This relieves you of the responsibilities as an employer. However, it is significantly more expensive, and you lose control over who is coming into your home.
- An introductory organisation like Care.com brings caregivers together with those looking for care. You have complete freedom over who you work with and what arrangements you make, but again, you will probably end up as an employer.
| Local authority caregiver | Not your employee |
| Caregiver independently recruited by you | Most likely your employee – verify status |
| Caregiver working via a home care agency | Not your employee |
| Caregiver recruited via an introduction agency | Most likely your employee – verify status |
What if I’m not funding the care myself?
Many people get direct payments from their local council or NHS trust to pay for some or all of their own care. However, the source of the money has no bearing on the caregiver’s employment status.
If you are receiving direct payments, keep a record of everything you spend (receipts, payment advices, etc.). Your council or trust will want to see how you are spending the money.
Who should be the employer?
As a general rule, personal caregivers are employed directly by the person in need of support. But not all care recipients have the physical or mental capacity to carry out the responsibilities that come with this. If this is the case, a family member or other representative can take on the role of employer instead and register with HMRC.
What are my responsibilities as an employer?
- Check that your caregiver is allowed to work in the UK.
- Take out employer’s liability insurance.
- It’s sensible to request a DBS check. As an individual employer, you will need to ask a local authority, NHS organisation, or another body to organise this on your behalf.
- Pay at least the National Living Wage (over 23s) or Minimum Wage (under 23s). Pay may reflect factors such as experience, location, and antisocial hours, but according to Care.com data, the average hourly rate for senior caregivers in the UK is between £10 and £13.
- Make sure that you are aware of the special rules that apply to pay for sleep-in shifts.
- Provide your caregiver with an employment contract and payslips.
- Ensure that your caregiver does not work more than the maximum permitted weekly hours. Again, you need to follow special rules applying to night workers.
- If your caregiver meets certain criteria, you will also need to pay statutory maternity/paternity pay, sick pay, and redundancy pay, give them 5.6 weeks’ paid holiday a year, and contribute to a workplace pension.
- Register with HMRC as an employer and set up a PAYE payroll scheme. Deduct and pay your caregiver’s income tax and NI contributions.
- Pay employer’s NI contributions.
- Declare certain benefits in kind.
- Never pay your caregiver in cash to avoid tax. You could end up facing back-payments, hefty fines, or even prosecution.
This all sounds pretty daunting!
A payroll company can make your life much easier by handling many of the administrative tasks. Alternatively, you can opt to work with a home care agency who will take all this off your hands—but this will mean higher costs and a loss of control.
You can also find full details of your responsibilities as an employer on the UK government’s website.
Take a deep breath. You’ve got this.
