⚠️ This is a news story and may not be up to date. You can find the date it was published under the title. Our Tax Guides feature the latest up-to-date tax information and guidance.
Calling all new care workers
Domiciliary care workers (those that travel around looking after people in their own homes) do a hugely important job but can sometimes face challenges in understanding their minimum wage, tax and benefits positions, due to the complexity of the rules combined with their varied travel and working patterns.
In this article we tell you about our factsheet that we have developed especially for care workers that can help you better understand and manage your position.
We know that there have been many new recruits into the care sector as a result of the coronavirus. If you are one of them and have just received your first pay packet, you may have questions about the way that you have been paid (which is probably by reference to 'contact time only' and perhaps with a small mileage allowance on top, even though you spend a lot of time driving around?!).
This can not only be confusing in itself, but can impact on your tax and benefits.
For example, did you know that if your employer does not give you a mileage allowance or gives you one that is less than 45p per mile (for the first 10,000 miles) then although this may not be a breach of the minimum wage rules (provided the amount you are paid for client contact time makes up for the time you spend travelling between assignments and the expenses you incur in doing so), you may be able to claim tax relief and deduct those costs when calculating income for tax credits and other benefits?
Our Minimum wage, tax and tax credits help for care workers factsheet offers information and guidance on these issues, including:
- The basics of how to calculate if you are being paid the minimum wage
- Whether travel time counts as hours worked for minimum wage purposes
- Deductions that can be made when working out pay for minimum wage purposes
- What happens for minimum wage purposes if your employer pays differing rates for contact time and travel time or if calls are cut short or overrun
- What to do if you are being underpaid the minimum wage
- How minimum wage arrears are treated for tax and National Insurance purposes
- Whether tax relief is available for unreimbursed costs you incur as a care worker
- How to claim tax relief yourself (without having to pay to use a tax refund company)
- How Working Tax Credit (WTC) and universal credit works for care workers
It also includes helpful ‘real-world’ worked examples, a template time/mileage log and links to more help. The new factsheet supplements the more detailed information and guidance that already exists in the Issues for paid care workers part of our website.
⚠️ Important: If there was one overall point that we would like new care workers to take-away from the factsheet, it is that it is extremely important that you keep good, detailed records of your working hours and travel costs or mileage – not only to support a claim for tax relief (and in some cases to deduct certain expenses when calculating income for tax credits and other benefits) but so that you can self check your position under the minimum wage rules.
If you are a new care worker and find the factsheet useful, please do share the factsheet amongst your colleagues. If you feel it would be beneficial for LITRG to expand on any of the areas covered or if you do not think we have covered what you wanted to know, or would like to tell us of your experiences to help inform our work in this area – please do contact us.
Contact: Meredith McCammond (click here to Contact Us)
(First published: 26/06/20)