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Working as a paid carer: Are you employed or self-employed?

Posted on 23/05/2014

Whether you are employed or self-employed as a paid carer is down to a number of different factors. It is important to note that your employment status is not a matter of choice; they are defined terms and it depends on the conditions of the work that you are carrying out. If you are setting up as a paid carer on your own, then it is important to check that you meet the criteria for self-employment to avoid any problems with HMRC.

There are pros and cons to both being employed by the service user and working for yourself, so make sure that you are aware of these before making any decisions.

If you are going to be self-employed, then you need to register with HMRC so that you can use self-assessment to pay for taxes, National Insurance and any other deductions. If you are self-employed then you are responsible for running your business, and you are affected by its success or failure.

If you are employed by the service user or an agency, then you will be entitled to certain employment rights, such as paid holiday, you don’t have to deal with your tax or national insurance, and you don’t take on any risks of running a business.

Here is a brief overview of the conditions that determine your employment status.

You are likely to be employed if:

• You have to do the work yourself (ie, you can’t send someone in your place)
• You are told when, where and how to work
• Someone can move you from one task to another
• You have to work a set number of hours
• You are paid a regular amount
• You can get overtime or bonuses

You are likely to be self-employed if:

• You can hire someone else to carry out your work at your own expense
• You decide when, where or how to work
• You can make a loss as well as a profit
• You agree on a fixed price for a job, regardless of how long it might take
• You risk your own money in a business
• You provide equipment to enable you to perform your role
• You regularly work for a number of different people

You might not meet all of the criteria for any one status, but you will probably tick the majority in one or the other, which will help you determine your employment status. HMRC has a detailed leaflet on this topic, which offers further help.

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