What difficulties could there be with contracting with a self-employed PA?
Itâs not a problem as such, and can suit people who want a flexible way of working, although issues could arise. Some councils may have specific rules about self employed PAs.
The main thing to look at from a service user perspective is whether HMRC could consider them an employee, even though they are self employed, registered, pay tax correctly and so on. There is a standard guide here : Check employment status for tax - GOV.UK
Taking someone on self employed but HMRC subsequently considers them an employee could have an impact on you further down the line, such as late registering as an employer, late filing of pay information, failure to assess for pensions, failure to consider other employer costs.
A self employed PA may want to charge a higher hourly rate to you. In our experience, councils will only usually fund a PA rate for employees, or an agency rate to registered agencies. A self employed PA could charge you ÂŁ14 per hour but a council may only give you ÂŁ9.50ph plus costs, meaning you would have to pay the difference personally.
The benefits of being an employee are sometimes overlooked. Self employed PAs have to pay their own costs and insurances. They donât qualify for sick pay, maternity/paternity pay etc, pensions, holiday pay or annual leave. They wouldnât be entitled to any redundancy payment if care ceased.
On the face of it, paying a single invoice instead of running a payroll seems easier, but the benefits and employee can get and the reduced risk to the employer should outweigh this.
There are other reasons why self employment may or may not be appropriate, but these are the main points. Hope this helps.
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@Andrew-QuillAccounts - is there not a fairly big hurdle with the nature of PA work in defining as self employed? You might be reliant on the individual, e.g. it might not be appropriate to send another person in their place, and any equipment involved it may be specific to you - two red flags for HMRC. Do you know any scenarios where it is reasonably clear? Comprehensive response BTW, Iâm just concerned contracting a self employed PA may not be without risk no matter what your council or HMRC sayâŚ
In past experience with HMRC there will always be situations where itâs unclear. Their own Employment Check is designed to be indicative rather than definitive.
I think itâs more applicable to social support rather than for personal care. Someone who can assist people socially such as on walks or shopping, could reasonably tell someone when they are available or book someone in, advertise their services publicly, and have multiple clients. Whether they could send another person instead is debatable, but they could still be self employed. In this case itâs closer to a personal shopper I suppose.
Itâs very similar terms on which, for example, a DJ works at weddings or discos, or a personal trainer or masseur who visits someone on a regular basis.
Personally I donât think thereâs a particular need for anyone to be a self employed PA because of the potential risk to the employer as much as the PA themselves, and also the benefits they miss out on as an employee, but I think there can be certain support scenarios where it may be applicable and possibly justifiable.
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Interesting discussion I would be interested in thoughts around the item noted below from the HMRC website titled:
Carers and Personal Assistants
Youâre classed as an employer if you pay a carer or personal assistant directly, even if you get money from your local council (âdirect paymentsâ) or the NHS to pay for them.
Ask your local council about organisations that can help with your employers responsibilities, such as recruiting and paying your carer
I think it is quite clear and gives a definitive answer to this question and I am interested in what others think about this.
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Thanks Andrew, I think we are on the same page there - Iâm still hoping to learn about those support scenarios and the motivation to be SE in this capacity. So far I understand it to a degree from the position of having/wanting multiple clients (and of course more dubious practices!) Potentially there is an argument that it makes life easier for the supported person, for example easier to manage poor performance, but I imagine only if there is choice of SE PAs.
Yes this seems quite clear to me, particularly as it is specifically addressing PAs and Carers under their own heading. I can see why there might be confusion though because of the overview:
Youâre usually considered the employer of a nanny, housekeeper, gardener or anyone else who works in your home if both:
- you hire them
- theyâre not self-employed or paid through an agency
With the only specific exclusion being Au Pairs and vagaries of the wording âusuallyâ there is scope for people to see what they want to see.
Iâm not sure if itâs best to add to this post or start a new one, as itâs not had any activity for a while, but Iâll give it a tryâŚ
Is anyone aware of any best practice guidance for someone who is considering paying a self-employed PA through an option 1 direct payment, i.e. things to consider for the person paying the PA and/or the PA themselves when starting/ending an arrangement? Thanks
Hi Justin,
Thanks for the post about contracting with a self-employed PA.
Weâve produced a fair bit of information on this in the PA Employer and PA Handbook, which you can find here: https://handbook.scot/
If you do a keyword search for âself-employedâ, a whole range of articles and resources come up. So you have articles such as:
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âWhatâs the Difference Between an Employed and Self-Employed PA?â which you can find here: https://handbook.scot/article/whats-the-difference-between-an-employed-and-self-employed-pa/
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And: âSelf-Employed PAsâ which you can find here: https://handbook.scot/article/self-employed-pas/
You also have resources such as:
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âLow Income Tax Reform Group: Is your PA employed or self-employed?â
https://www.litrg.org.uk/sites/default/files/files/LITRG-factsheet-PA-employed-self-employed.pdf -
And âHow to register as self-employed with HMRCâ which you can find here: https://handbook.scot/wp-content/uploads/2022/05/How-to-Register-as-Self-Employed-with-HMRC-Simply-Business.pdf
So thereâs lots of information aimed at both PA employers and PAs. One of the important things to do for anyone looking to contract with a self-employed PA, would be to check that the PA is actually self-employed. The person can ask the PA for:
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Their Unique Taxpayer Reference (UTR) number, which someone receives when they register with HMRC as self-employed
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Details of their Public Liability Insurance (to cover them when working)
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A copy of their Contract and Terms and Conditions
Thereâs no requirement at the moment for any PA to be a member of the PVG scheme but this might be seen as good practise and self-employed workers can join the scheme and ask for a copy of their scheme membership to share with anyone receiving their services.
I hope thatâs a useful starting point.
Many thanks,
Mark
Thanks, Mark, and thanks for the links to more info. I suppose it reinforces that most of the info about using a self-employed PA is about the legal stuff around âbeingâ self-employed and what I feel is missing is a bit of âsofterâ guidance setting up an agreement with a self-employed PA, or just an example of a written agreement that could be used as a template. Sometimes an experienced PA may lead on this, but if neither the self-employed PA nor the person using them has a lot of experience, there is a bit of an information/advice gap.
Thatâs a fair point Justin, I think there is scope there to provide something here and we can make a recommendation for updating the handbook. Do you have a need for guidance just now, or more highlighting gap?
Thanks for your comment, Jeremy. I work in an area (Perth & Kinross) where self-employed PAs are âallowedâ by the LA and where they are a crucial part of the workforce, especially rurally. I would hazard a guess that it is maybe 50/50 employed/self-employed across the region.
Iâve spoken to a few self-employed PAs who have been very pro-active in developing their own agreements over time, often following situations where they have felt vulnerable and have built in additional clauses to protect themselves. I contacted the PA Network who advised that âboth parties should agree a service agreement that details the duties, hours and pay rateâ so it would definitely be helpful to be able to offer an example of this (or a link to one) within the handbook.
I would still be interested in any guidance that might be available at the moment, but I have found some useful resources in the meantime. Thanks again
We used to employ a small team of casuals - all friends - , and they were able to substitute and cover each other when needed: so they were self employed legally: substitution is one aspect of this.I did check the rules carefully. But since then we have moved to employment status with set hours, and use a payroll company.
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If anyone has an example of a contract for self/employed P/A i would be interested to have it
Many thanks
Julinka
Hi Julinka,
Thank you for your post and question about self-employed PAs contracts.
I think it would be really helpful for anyone that was thinking of contracting with a self-employed PA, to know what should be included in a âgoodâ contract. Maybe certain information such as:
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Their Unique Taxpayer Reference (UTR) number as allocated by HMRC - to confirm they are registered with HMRC as self-employed for tax purposes
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Relevant Insurance that covers them working in someoneâs home as well as outside of the home
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Confirmation of their membership of the Protection for Vulnerable Groups (PVG) scheme - which will become a requirement for all âregulated rolesâ later this year
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An outline of the âTerms and Conditionsâ of the contract
In terms of an example of such a contract, I have come across an example before, but Iâm not sure if itâs a finished version that I can share publicly. Iâll check with the people who have produced this and let you know.
Could I ask, would you be looking for this as a self-employed PA, or as someone looking to contract with a self-employed PA?
Many thanks,
Hi Mark and Julinka.
Mark is right and I would offer the same advice. On contracts, you canât have a contract of employment when a person is self-employed. I have assisted direct payment holders and self-employed PAs to draw up an agreement, basically setting down the details that would be in a âstatement of particularsâ if the person was employed- times the PA will offer their service, pay rate, communication plans (e.g. how to communicate if the PA is going to be off sick or needs to cancel a day), what the PA will support with and confirmation that as a self-employed worker that they are responsible for their own income tax, national insurance, public liability insurance and any other costs associated with their operation. Hope that helps.
Hi Becs,
Many thanks for the reply, thatâs really helpful.
Itâs good to be aware of the types of things that would need to be included in a âstatement of particularsâ.
Many thanks,
Mark
Hi Julinka,
Iâve now had the chance to speak to Hayley at Grow Biz and Sharon at the Ayrshire Independent Living Network. They were able to share a copy of a draft contract that a self-employed PA could use.
Iâm aware that this is an initial draft and it would be important for any self-employed PA to take further advice and check that all areas are covered in any contract they want to make use of.
Iâve taken some pictures that Iâve added below to show you what this looks like. This is not the whole document, so if youâd like me to send the full version, please email me at: mark@sdsscotland.org.uk
I hope that helps and gives you something further to go on.
Many thanks,
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