PAYE for domestic cleaner

Dimey

Please can you tell me if its true that I would have to register as an employer and operate accounts to deduct PAYE & National Insurance and buy employers liability insurance if I pay my neighbour £10 per hour to clean my house one hour a week?

The neighbour is a friend and doesn't go to work or earn other income. She would be being kind but I feel I should give her the money.

If its true then we shan't do it as I couldn't cope will all the admin. If its not true then I will be grateful for the help and happily pay the £10.

I don't want to inadvertently fall foul of any laws. Thank you for any advice.

spadoosh

It would be better for you if the cleaner was self employed and offered cleaning services. That way all the tax and ni is dealt with by their side. They just charge you £x amount per cleaning session.

Technically it could be argued you are an employer because of the specific arrangement. Not all cleaners are employed by the people they clean for though but becuase of the nature of the way you describe it, it does sound like an employee /er relationship.

Id suggest the cleaner goes self emplyed. They charge how much they want per hour and file a self assessment at the end of the year. No PAYE and ni for you, a bit more paperwork for the cleaner.

00ec25

technically yes you would need to treat them as an employee

https://www.gov.uk/au-pairs-employment-law

the alternative is they register themselves as self employed and have a "contract" with you to do the work but they are themselves responsible for their own tax. HMRC may (I say may, not will) decide however that someone with only a single client paying £10 per week is not genuinely self employed. Although I would suggest the chance of HMRC taking a look at £10 is zero unless your neighbour receives the money and does not amend any means tested benefits they claim that would be impacted by them earning £520 per year

le_loup

I don't think anyone should worry about a tenner a week. If the cleaner takes the money it is her responsibility to account to the authorities should she need to.
Do people really set themselves up as an employer to have their windows cleaned or to have their car washed?

Pennywise

le_loup wrote: »

Do people really set themselves up as an employer to have their windows cleaned or to have their car washed?

No, but they usually have those services done by a business, even just a sole trader business is still a business.

If your neighbour only does your cleaning, and no one else's, she isn't self employed (which means being in business), she is your employee, but as others have said, given the small amount, no-one will care as long as she declares it if she needs to, on her tax return as "other income".

Dimey

Thanks everyone.

It does seem strange for the Inland Revenue to worry about tax from £10 but reading the .gov link it seems clear that officially I would have to register as an employer and deduct tax, NI & have employer liability insurance - because I would be my neighbour's only employer so she couldn't be classed as self employed.

As you say I bet there are lots of folk helping people out this way all round the country without registering as employers. You'd think there would be a rule that you only need register as an employer if you are paying over a certain sum per week eg £50 to make it worthwhile Inland Revenue staff dealing with it.

But I don't want to break any rules. Even if I can think of better things Inland Revenue could do with their time than take tax and refund tax from £10 every week. Eg. stop letting big corporations get away with their tax. Ha Ha.

I'll stick to cleaning my own place, all be it a little less frequently and a little less diligently :-)

chrisbur

The following are the conditions when you have to register as an employer for PAYE.

As soon as you first employ someone, you will need to register as an employer with HMRC if any of the following is true:
• You’re paying them at or above the PAYE threshold
• You’re paying them at or above the National Insurance Lower
Earnings Limit
• The employee already has another job
• They are receiving a state, company or occupational pension
• You’re providing them with employee benefits.

If none of these apply you do not register.

chrismac1

under £113 per week you have no obligation to do anything, though in my view it makes sense to issue a payslip with her NI number on it and keep a copy. This protects you from future problems with HMRC if she turns out to have lots of other income.

Note parts of the HMRC website are in my view deliberately misleading, surprise! surprise! 90% of the time they mislead you to pay more tax or register for tax when you don't need to. Other parts contain stuff which is HMRC's wishful thinking of what UK tax law is, as opposed to what it in fact is.

Trust this bunch of incompetent bumblers at your peril!

sheramber

You can confirm here
https://www.gov.uk/register-employer