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Self-Employed Carer Tax Issues


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3 replies to this topic

#1
southview

southview

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Hope this information is helpful to those who are self-employed providing care. I am a self-employed carer who will be working solely for one privately funded client. I have always paid my tax and national insurance with no problems as I have always had more than one client. Having spoke to my accountant, this new position could be construed as being employed due to the nature of the job. My contract with the new client has to show that I decide what hours I work and when I decide to work, also to include that I have the ability to use a substitute person to subcontract the work. My contracts have always included this information anyway.I wish things could be made more simple.

#2
Simon Taylor

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Great to see you on the forum and thank for your comments.

The area of self-employment and being employed often raises it head especially if you only have one client but even when you have more than one you can be self-employed by some client and employed by others. The responsibility is on the employer (the client) to ensure they make the right decision but as client often needs support it is worth knowing the following web link. This Revenue and Customs tool help employers and or employees decide on employment status and covers issues of substitution (sending in someone else to do the work if you cannot) etc. It is only a few questions long and should give you a clear idea.

http://www.hmrc.gov.uk/calcs/esi.htm

If this does not give a clear answer then the page also link you to HMRC’s helpline where advice should be taken to avoid incorrect tax relationships and the possibly that the client is seen as an employer but is not paying the correct tax and NI contributions.
Your right it is not so simple and I doubt HMRC will make it simple in future as the legislation was never designed for the small care provider but maybe if other are flagging this as an issue we could look at talking to them again on this issue.

#3
southview

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Thanks for the reply. I would say that it is important that individuals use the services of an accountant. It may seem an expense that you can do without, but you can set it against tax and they are up to date with any changes etc.

#4
Matthew Chapman

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First I would like to talk about terminology. Usually the term Carer refers to an unpaid person for instance relative or friend not someone who receives remuneration for the support they give. Support worker or Personal Assistant is th usual expresssion.

If you are part of shared lives scheme or possibly share your own home with the person you provide care for then the are special rules that can apply to make acccounting easier.

If you work directly an excluslively for one person then you probably are employed but shhould be advantages to this. Holiday and sickness pay, Not needing your own person / public liability insurance to name jus a few. If the person you are supporting is getting direct payments from their local social services department then you should be their employee.

Also it is perfectly possible to be employed by one person and self employed in another context. If in doubt see an accountant. If you are in a shared lives scheme see your scheme manager or ask again about Tax implications. Hope this helps.

Matt Chapman




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