Employing someone to work in your home

Our team of experts tell you all about the tax implications of employing someone in your own home

Our experts at DSR Tax Claims know how hard it is to find good, quality information about HMRC’s tax regulations that is easy to understand, and that’s why we have created these handy guides to tell you everything you need to know. Our aim is to make life easier for our clients and that is why we want to share our expertise with you. You can also call our friendly team on 0330 122 9972 – we’re the tax experts you can trust. Or you can check out our online calculator to see if you could be due a refund.

What do you need to consider when you employ someone to work in your home?

If you ask someone to work in your home, maybe as a gardener or nanny for example, you are usually considered to be their employer. This means that you have certain responsibilities as a result of their employment – for example, you are responsible for meeting their rights as an employee, as well as deducting tax and National Insurance on their behalf.

This applies to anyone who works in your own home if both of the following apply:

  • You hire them
  • They are not considered to be self-employed or employed through an agency to work at your home.

There are special rules for au pairs who work in your home. Au pairs aren’t usually considered to be employees so certain rules don’t apply to them.

What about carer’s or personal assistants?

If you pay the carer or personal assistant directly, you are considered to be their employer – even if you receive money from the NHS or your local council (in the form of ‘direct payments’) to pay for them. Your local council might be able to help you by putting you in touch with organisations who can help you with your responsibilities as an employer.

What are the rights of employees?

Anyone who is considered to be employed by you has the following employee’s rights:

  • They have the right to have an employment contract
  • They must be given payslips
  • They must be paid at least the National Minimum wage
  • They must not be asked to work more than the maximum hours allowed per week.
  • If they meet the eligibility requirements, they are entitled to receive Statutory Sick Pay, Statutory Maternity Pay, paid holidays, redundancy pay as well as a workplace pension.

What are your responsibilities if you employ someone in your home?

You are classed as their employer, which means you have the following responsibilities:

  • You need to check that the person is entitled to work in the UK
  • You must have employer’s liability insurance
  • You must register as an employer and set up a payroll for the employee, or contract someone else to run the payroll on your behalf.
  • You need to deduct and pay the employee’s Income Tax and National Insurance contributions.
  • You need to pay any statutory benefits that your employee is entitled to receive.
  • You may need to pay for mileage if the employee uses their own car while carrying out their employment duties for you

You’re not allowed to ask your employee to become self-employed so that you are excused from your responsibilities as an employer.

What about au pairs?

As mentioned before, au pairs are treated differently to other employees who work in your home. Au pairs usually live in the same home as their employer, as part of the family, and therefore aren’t classed as an employee. They also aren’t entitled to the National Minimum Wage or paid holidays.

Because they are treated as one of the family, they usually get a smaller amount of money like pocket money (usually around £70 to £85 per week instead). Depending on how much ‘pocket money’ they receive, they may be liable to pay Income Tax and National Insurance.

An au pair isn’t classed as an employee or worker if most of the following apply:

  • They are an EU citizen or have entered the UK on a student visa or Youth Mobility visa
  • They have a signed letter of invitation from their host family, including details of their stay, such as accommodation details, pocket money, hours they are expected to work and so on
  • They have their own private room in the house which is free of charge to them
  • They eat their main meals free of charge with their host family
  • They help with light housework and childcare, for around 30 hours per week
  • They get reasonable pocket money
  • They are allowed time to study and can practise their English with the host family
  • They are able to attend English language classes in their spare time
  • They may sometimes go on holiday with the host family to help look after the children
  • They can travel home to visit their family during the year
  • They are here on cultural exchange programme
  • They will learn about British culture from their host family and will share their own culture with the host family.

However, as you can see the rules regarding au pairs are pretty vague so it is a good idea to check whether you meet the criteria, if you employ someone as an au pair in your home.

How can DSR Tax Claims help?

We aim to make life as simple as possible for our clients and that includes giving you the information you need to make your taxes (and your life) simpler and less stressful.  Our team of experts at DSR Tax Claims are always on hand to help our clients and our excellent standing with HMRC means that we can make sure you don’t fall foul of their regulations, while claiming your maximum tax rebate. We can even take care of all that paperwork and deal with HMRC on your behalf too. Call our friendly team on 0330 122 9972 – we’re the tax experts you can trust.

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