Cash in hand to our cleaner

gratefulforhelp_2

I'm with the people who say she is self-employed and therefore it is not your responsibility. However, every time you decide to pay someone in cash there is the possibility you are helping them to evade tax, so paying by cheque seems a good idea.

If she is comitting benefit fraud (do you think she is?) do you really want her in your house?

rosered1963

Hi Op - You asked for some expert advice, so I will give you mine, as far as it goes. I know about this subject because for many years I worked in specialist National Insurance and tax liability with reference to NIC Class 1 and Class 2 non-compliance where disputes arose as to what the liability was.

As far as I understand it, you obtained her through an agency - she cleans your house, you tell her what to do, and for that you pay her an hourly rate. You are the employer - she is not self-employed. There are strict criteria for what is considered legitimately self-employed, and being a cleaner paid by the hour cash in hand in someone's house would not fit those criteria. No-one can categorise themselves as self-employed because it suits them, and you cannot choose to treat someone as self-employed if they are working for you. For example, a self-empolyed person provides their own insurance, "tools of the trade" and a "contract of service". They choose their working hours, set their fee, and take on any financial risk. Please see here - it sums it up neatly: http://www.hmrc.gov.uk/employment-status/index.htm#1

You have fulfilled your obligations as far as tax and NIC are concerned (you had none as she was earning well below the relevant rates).

As for declaring earnings - that is down to her, not you. If you knowingly took her on while encouraging her to claim benefits while taking cash in hand from you, you would be in trouble, but you clearly didn't do that.

There are many people in your situation, and indeed, many people in this lady's situation. I agree with the other posters about not paying in cash. Anyone who demands cash for work is probably trying to hide the earnings from someone. You can't really help her - if she claimed benefits and did not declare earnings, she has committed fraud.

Good luck. I would go through an agency in future that employs the cleaner, rather than you being the employer. For one thing, employed people are now legally entitled to paid holiday, and how would that work if someone who was paid cash in hand raised an issue with you about that? What if she injures herself or someone else in your house? I presume that she doesn't have public liability insurance! Being an employer is a responsibility and can be a headache, and that may be why some people use agencies when they just want some domestic work done, so that the company employs them and sells a service to you, and you are not involved in the employment side at all. Either, that, or use the services of a self-employed person and ask for proof from them that their S/E status has been accepted by the Inland Revenue.

That agency you paid a retainer to does not sound thorough - they should have made it clear who was responsible for what, contractually.

best wishes