Problems of being an employer

Using direct payments to buy in personal services often means that you become an employer of your carers or personal assistants, and becoming an employer brings with it a number of responsibilities that can be daunting to many people.

One of the main responsibilities is in running payroll schemes for your employees and this together with some other issues such as national minimum wage, statutory sick pay are administered by HM Revenue & Customs (HMRC). There are however other issues such as employment law and health and safety matters to be considered. You should be given a copy of the Department of Health booklet ‘A guide to receiving direct payments from your local council’ Read carefully the relevant sections on employer issues’.

Some local authorities will cost into the direct payment access to either in-house or commercial payroll support services but some do not provide funds to cover such services and some people prefer to handle employer issues themselves.

For these people we would offer the following advice:

• You need to be clear as to whether you are employing someone or whether HMRC will accept that they are self employed. Look on these sections on our website regarding those who are employed and self employed.
• When you register your payroll scheme with HMRC make them aware that you are a small ‘non-business’ direct payment employer.
• All employers now have to file their payroll returns and forms online but LITRG successfully worked with HMRC to reach an agreement where some ‘care and support’ employers could continue to file paper returns and forms without penalty. The conditions are that:
  • the care or support services must be provided to the employer or a member of their family;
  • the recipient of the services must have a physical or mental disability, or be elderly or infirm;
  • the employer cannot have received a tax-free payment in respect of online filing in the preceding three years;
  • the employer must be filing their return themselves, not having someone else (such as a relative or accountant) file it on their behalf
• However if you do have access to, and are confident in using, a computer and the internet there are both the HMRC Employer free basic PAYE tools and also some commercial software packages which will prepare the calculations of tax and national insurance deductions and deal with the electronic filing of relevant returns and forms. The HMRC version is however limited in its use for electronic filing to nine or fewer employees at a tax year end.
• More details of the free PAYE tools and HMRC accredited commercial software packages can be found on the HMRC website. You can download the free PAYE tools using the link.

Further help is available from a number of sources including most council websites and the National Centre for Independent Living. Information can also be found on Directgov.