|Can domestic staff be self-employed?|
"Can't I just ask my employee to sort out their own tax?" this is a question we're frequently asked by potential employers. Whether someone is employed or self-employed depends on the terms and conditions of their work. It is important for all employees to know their employment status as it affects employment and benefit rights, and how to pay tax and National Insurance Contributions.
It is equally important that you, as the employer, are absolutely certain whether it is your responsibility or theirs to declare tax and NI.
How to determine employment status
A worker is probably considered self-employed if they:
*Please note that these lists are not exhaustive.
The exception to the rule
However in some cases HMRC do grant self-employment status to domestic workers. It is very important to remember that if you take on domestic staff who was previously self-employed they should contact the Revenue and request confirmation in writing that their status still applies in the new position.
|Employing European nationals|
Most nationals from the European Economic Area (EEA) can enter and work in the UK without restrictions. You will need to ask nationals from all EEA countries to produce a document showing their nationality since their are specific restrictions for certain nationalities.
|Always agree a gross wage with your employee|
Employers often agree a net (i.e. take-home) wage with their employee, but in reality they are always paid a gross salary, with tax and National Insurance Contributions deducted and paid to HMRC on a quarterly basis by the employer. Although many domestic employers tend to look on this as an additional cost, it is actually part of the employee's gross wage.
If you agree a fixed net wage you are committing yourself to paying all of your employee’s income tax and NI to make up their gross wage, irrespective of their individual tax code or tax position.
Please also be aware that a gross wage is not the total cost to you as an employer. In addition to this you have to pay an Employer’s National Insurance Contribution, which is not part of the employee’s gross wage. This extra sum will be advised to you when we send your first payslip for your employee.