As many people choose to employ a personal assistant (PA) as a solution to their care needs, managing pay is an important part of direct payments.
As an employer, you are responsible for ensuring that your staff are paid on time and any tax, National Insurance and pension contributions are deducted where applicable. You have the choice of how to manage this.
Firstly, you may decide to manage the payroll yourself, in which case you will need to register with the Tax Office (HMRC) as a ‘new employer’. You can call the new employer’s helpline on 0300 200 3211.
They will send you a starter pack with the forms you would need to complete each time you pay your staff. They will also enclose tables to enable you to calculate tax and National Insurance.
It is important to bear in mind that you, as an employer, may have to make Employer’s National Insurance contributions also.
Alternatively, DPSS can offer advice regarding payroll services who can pay your staff, 4 weekly, monthly or however you wish and they will send you a payslip to give to them. They will also inform you how much to send to the Inland Revenue, if appropriate and will deal with the end of year tax return on your behalf.
Some payroll services can also pay your staff by BACS payment (from the direct payment account, or prepaid card into the PA’s personal bank account) and pay the Inland Revenue from your direct payment account or prepaid card, hence making the process easier to manage.
The payroll service will also assist you as an employer to comply with the Pension Regulations which require all employers to have available a pension scheme for staff who either qualify through earnings or elect to join a scheme.
DPSS strongly advises the use of a payroll service and to pay all staff through the PAYE (pay as you earn) scheme. You can still do this even if the personal assistant you wish to employ states that they are ‘self-employed’*. A person may say they are self-employed, but if they do not declare their earnings received from you to HMRC, you will be responsible for any tax or NI due, this is why it is advisable to pay them through PAYE, preferably using a payroll service.
Our advisors can produce a budget to show how to use the direct payment taking into account all anticipated expenditure.