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Basic document checks PDF Print E-mail
According to the Asylum and Immigration Act 2006 all UK employers are required by law to make basic document checks on each person they intend to employ in order to establish that they have a right to work in the UK and are here legally. Failure to make these checks puts the employer at risk of committing a criminal offence.

It is essential that these checks are carried out on all potential employees whether or not you think they have a right to work in the UK by making assumptions based on their appearance or accent. You could face prosecution under the Race Relations Act 1976 and an unlimited fine if you do not ask all potential employees these questions.

Please tick all documents seen, using the Illegal worker’s checklist provided by Stafftax when you subscribe to our services, and take copies and keep them in a safe place. Both the checklist and the copies may be used to help you establish a statutory excuse if the documents later turn out to be fraudulent or the worker is proven not to have the right to work in the UK.

If the person you wish to employ produces a document from List A the “statutory excuse” is provided for the whole of their employment with you. A document from List B indicates that the individual only has limited leave to remain in the UK and therefore you must repeat the document check at least every 12 months until the employee can produce documents from List A.

If they cannot produce documents from List A do not assume that you must automatically dismiss them on the basis that they are an illegal worker. You will need to establish if they are in the process of receiving documents from List A and use that information to inform your decision on the right course of action.

If you knowingly employ someone without the right to work in the UK you are committing an offence that carries a new penalty of up to two years in prison and/or an unlimited fine. Failing to establish the statutory excuse by not carrying out the checks also carries a punitive penalty of up to £10,000 per illegal worker.

Please note that for persons recruited before 28 February 2008 the rules are slightly different and the document checks provide employers with a Section 8 defense, rather than a statutory excuse.

 

employment guide

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 employed if they:

  • have to do the work themselves
  • can be told at any time what to do, where to carry out the work or when and how to do it
  • work a set number of hours
  • can be moved from task to task
  • are paid by the hour, week or month
  • can be paid overtime or receive bonus payments

A worker is probably considered self-employed if they:

  • can hire someone else to do their work or engage helpers at their own expense
  • risk their own money
  • provide the main items of equipment needed to do their job, not just the small tools that many employees provide for themselves
  • agree to do a job for a fixed price regardless of how long the job may take
  • can decide what work to do, how and when to do the work and where to provide the services
  • regularly work for a number of people
  • have to correct unsatisfactory work in their own time and at their own expense

*Please note that these lists are not exhaustive.

The exception to the rule
It is clear to see that in most cases domestic employees do not meet HMRC's criteria for self-employment.

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.

Transfer of self-employment status between jobs is not automatic, and each situation should be considered individually. This is the employer's responsibility, and if they do not receive written confirmation from the Revenue and it later comes to light that the worker is not self-employed, then it is the employer, not the worker, who will pursued for unpaid taxes. And in the eyes of the law it is a criminal offence not to declare an employee and pay tax and NI contributions on their behalf.

employment costs

Benefits in kind

Benefits in kind are sometimes provided by the employer in addition to the employee's salary. They are often taxable benefits and must be reported annually as part of employee's gross earnings.

Who pays the tax?
Benefits in kind offer a good example of why it is important to agree a gross wage with your employee. In almost all other types of employment the employee is always responsible for paying the tax on benefits. But as many domestic staff have net pay arrangements it means that you, the employer, are responsible for paying this tax, which can potentially be a very expensive experience.

Tax on benefits in kind is payable in arrears and is not reported until July following the end of the tax year. Sometimes it can take up to two years before payments are claimed by HMRC, and during the interim your employee can have moved from one job to another, leaving the new employer responsible for paying what can in some cases be a very large sum of money. If your employee is on a gross wage, however, then the tax is deduced from their gross income at their current rate of tax.

In addition to tax there may also be a Class 1A NI charge of 12.8% of the value of the benefit to be paid - the employer always pays this charge.

Examples of taxable benefits

  • Car
  • Accommodation
  • Health Club Membership
  • Travel
  • Interest Free Loan

NB: PLEASE NOTE THAT THIS LIST IS NOT EXHAUSTIVE.

Mobile phones are not considered a taxable benefit

Use of Car
The use of a car is not considered a taxable benefit if your employee only uses it during working hours. If however your employee is permitted to take the car home and use it as a means to get to and from work, then it must be reported as a benefit in kind.

Accommodation
If accommodation is provided for the employee and it has a separate front door and separate metering for gas, water and electricity, it is considered a taxable benefit and must be reported as such.

Please note that the information and examples contained on this page are to be used as guidelines only. If you have specific questions please contact Stafftax.