Direct Payments Self Employed personal assistants

Warwickshire County Council does not recommend contracting with self-employed individuals for personal assistant tasks. There are very few instances when someone can be truly classed as self-employed if they work for someone who receives direct payment. HM Revenue and Customs (HMRC) can help you determine your worker’s correct employment status.

Important

You need to ensure the person supporting you can be classed as self-employed, as you could become liable for tax and National Insurance payments backdated from when they started working for you. Your Direct Payment may be suspended or end if the council are not satisfied that the arrangements in place comply with HMRC requirements.

*Please seek advice before recruiting anyone who claims to be self-employed.

Sometimes an individual will be classed as self-employed in another role, but this does not determine their correct status when they work for you. Just because a worker is self-employed in one job, doesn't necessarily mean he or she will be self-employed in another job.

Guidance on employment status can be found online on the employemnt status HMRC webpage.

The quickest way of getting HMRC’s view on whether your personal assistant is employed or self-employed is to use the Check Employment Status for Tax (CEST) tool. You will need to take a note of the unique reference number provided, plus retain a copy of the questions and the answers you provided. This will need to be produced should a query arise at a later date.

If you are unable to use the CEST tool, or are unsure of your worker’s employment status, you can telephone the HMRC Status Customer Service Team on 0300 123 2326 from 8.30am to 4.30pm, Monday to Friday, except bank holidays.

Other Considerations

Insurance

If your worker is confirmed as self-employed by HMRC you will not become the employer. The self-employed worker must have insurance and show you a copy of their insurance cover.

Agreement

A self-employed personal assistant should provide you with a contract of the service they are going to provide to you.

This needs to include details such as notice required to cancel service, the work they are going to carry out and how much they are going to charge. It is advisable to get something in writing from the personal assistant to state they will be responsible for paying their own tax and National Insurance payments to HMRC.

Hours of work

A self-employed person can choose when they work for you. You must decide if this will be suitable for you.

Payment

The personal assistant should provide you with an invoice for the work they have carried out, ideally 4 weekly or monthly. We would advise you ask the personal assistant to sign the invoice to say you have paid them or obtain a receipt for any payments you make.

We advise you do not pay the full hourly rate of Direct Payment you received from Warwickshire County Council, as you may still need to budget for other unforeseen costs such as contingency arrangements if your personal assistant is absent.

Self-employed workers are not entitled to paid annual leave.

If you have more than one personal assistant, they will need to invoice and be paid separately.

Tax and National Insurance

A self-employed PA will their own tax and national insurance.

Providing PA support

If the self-employed PA cannot attend their job for any reason, such as annual leave, sickness, it is their responsibility to provide replacement care, at their own cost.

Managed Account

If you have a managed account, the organisation managing your account will ask you to provide details of the self-employed person’s bank account details, as they can make payments directly into their bank account.  If you have a self-employed personal assistant, we advise you notify the managed account provider that you need to see a copy of the invoice and authorise it before payment is made. This will reduce the risk of any misunderstanding in the event of a query over payment.

The council can ask at any time to see copies of documents that support the arrangements you have in place that comply with HMRC and any other legal requirements.