The number of elderly or infirm people who directly employ a care worker or personal assistant to attend to their day-to-day needs has been increasing quite dramatically over the past few years.
Although the funding for such carers or personal assistants appears to be split between being privately funded or funded by the NHS England or local authorities, the relationship between the service user and the care worker/assistant is predominantly one of employer and employee. This means that the employer must operate PAYE and NIC on their care worker’s wages, deal with auto-enrolment for pensions as well as operate Statutory Sick Pay and other statutory payments. Often the role of employer (the one giving the instructions – not necessarily the one receiving care) is then taken by another family member or occasionally by a family friend. These schemes are known as “Care and Support” (C&S) Employers.
It is important to remember that the C&S Employment Schemes only apply to cases where the employment relationship is directly between the individual/family and the carer and not via a Care Agency who employ the carers and who then controls which carer goes to which patient and when and where. If you use a Care Agency to find carers for you, it is important to check whether the Care Agency will be employing them, whether you will be employing them direct (i.e.: you are a C&S Employer and the Agency has merely found them for you) or occasionally, if they are self-employed in their own right.
In an attempt to reduce the administrative burden that operating a PAYE scheme imposes, HM Revenue & Customs (HMRC) tries to operate a light touch where C&S Employers are concerned. Firstly, unless the person undertaking the role of employer already operates a PAYE scheme (for example they are in business for themselves and employ staff) and has to file under the HMRC scheme called RTI (Real Time Information), a C&S Employer is required to file only quarterly PAYE Returns on paper (albeit within 14 days of the end of the quarter). This recognises that the actual Employer is likely to either be the elderly or infirm individual themselves or a family member (possibly operating under a Power of Attorney) who is not professionally, or business trained. In allowing this relaxation of the RTI PAYE filing obligations, the need for expensive computer systems and payroll software can be avoided as well. The exemption from RTI filing can only be claimed if it is the employer who files the quarterly return and not some other person on the employer’s behalf. This means that if you hand full responsibility of the PAYE scheme to a payroll bureau you will not qualify.
Further relief is also available with the £3,000 employment allowance. This allowance works to reduce the amount of secondary (Employers) National Insurance Contributions an employer needs to pay (meaning it is not a grant). To claim the £3,000 allowance, it is important that you file as a C&S Employer. A C&S Employer is specifically defined as an individual who employs a person to provide domestic or personal services at or from the employer’s home where the recipient of the services (who may either be the employer or a member of the employer’s family) has a physical or mental disability, is elderly or infirm.
For C&S employees, there is also an exemption for board and lodging provided to “Home Care Workers” which otherwise could be construed as an accommodation benefit on which the employee would be taxed and the employer have additional reporting requirements.