Business requirements for personal assistants

  1. Issuing a contract
  2. Making a contingency plan

Employment status - employed or self-employed

The law says that it is the nature of the arrangement between the worker and the employer which determines whether the work is being done on an employed or self-employed basis.

It is important to use the correct employment status as this can have tax implications.

The rules are the same whether the client pays the personal assistant privately or uses direct payments provided by the council.

A personal assistant might work for some clients and be self-employed but work for others on an employed basis.

Using the HMRC employment status tool

The client and personal assistant are responsible for deciding the correct tax status. This should take place before signing a contract or starting work.

Use the HMRC tool to find out if a worker is employed or self-employed:

Check employment status for tax tool | HMRC

If you have any questions, phone the HMRC helpline on 0300 123 2326.

Employed personal assistants

Most personal assistants who support people with a higher level of care and support needs will be employed. This is because the structure of their day-to-day work tasks is decided by the person they care for.

HMRC says that a PA is almost always ‘employed’ if they:

  • have to do the work themselves, meaning it would not be acceptable for them to send someone else
  • work for only one person
  • are told how, when and where they will do their work
  • have to work a set amount of hours at times set by the client
  • are paid a regular amount according to the hours they have worked, and get paid for working overtime

If you are employed, you will be paid through PAYE.

Employment rights if you are employed

If you are employed, you have the right to equal pay, break and rest periods, paid holidays, sickness, redundancy and pensions, time off for dependents and maternity leave.

You will have a contract of employment. After one month, you are entitled to notice if you are being dismissed.

Your employer must have employer's liability insurance.

Self-employed personal assistants

A self-employed personal assistant is appropriate:

  • when the support can be delivered flexibly rather than at a set time
  • if the PA works for more than one client
  • for cover arrangements, including short-term cover of an employed PA

Self employed personal assistants:

  • will offer an agreed set of services for a fee, provide a quote and invoice the client for payment
  • work for themselves and can choose when they want to work
  • are responsible for bringing their own equipment
  • should arrange cover if they are unable to work

Registering as self-employed

You must tell HMRC you are self-employed.

HMRC will give you a unique tax reference number (UTR). You will use this to submit your annual self-assessment tax return. 

There are three ways to register with HMRC:

  1. Register for self-assessment online: Before submitting a tax return for the first time register for self-assessment, which can be done online: Register for self assessment | HMRC
  2. Apply over the phone: call HMRC on 0300 200 3310 to ask about registering.
  3. Apply by post: This likely to take a long time, so the other options are preferable.

One registered, you will receive your unique tax reference number.

Registering as self-employed if you have another job

You will need to register as self-employed with HMRC if you have another PAYE job. This will not affect your PAYE tax code. Once registered, you will receive a unique tax reference number in the post. This will need to be activated online within 7 days.

Your annual tax return will have information about all your income, including PAYE and self-employment.

Employment rights if you are self employed

If you are self-employed, you need to register with HMRC and pay your own tax and national insurance contributions.

You will need public liability insurance (and clinical indemnity insurance if you are working with health clients).

There is no guarantee of regular work and you do not have the same employee rights as an employed person. The terms of your contract with the client will set out your rights and responsibilities.

Further guidance

Is your PA employed or self-employed | Low Incomes Tax Reform Group

Understanding the employment status of personal assistants | Skills for Care

Taking on an employee | Low Incomes Tax Reform Group

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