Employing family for secretarial duties and administrative activities

neil5061

Hello all.
I am a locum doctor. My mother does all my administrative work i.e keeping track of expenses, tax returns, ensuring I am up to date with regulatory requirements etc.
I would like to pay her but not "employ" her. 
Would it be reasonable to pay her £10000 per year for this. 
Can she simply invoice me as a self employed accountant so that I simply pay her the 10000 and she deals with NI and tax when she files her return?
Thanks

neil5061

To add the above. She has her own salaried job. So this would be self employed work on the side which she can invoice me for.

Sea_Shell

What if she makes a mistake...would she have insurance?

TBagpuss

Short answer, yes, you can use her a subcontractor, but you need to make sure that she is genuinely self-employed - https://www.gov.uk/employment-status/selfemployed-contractor, and you should consider things such as whether she has insurance. She would need to be sure that she doesn't have anything in her employment contract which would prohibit this and would of course have to do a tax return.

As to whether £10,000 a year is reasonable -  none of us can assess that not knowing how much work is involved - you'd have to look at how many hours a week she typically spends / would spend on this work and ho that would compare with what you would pay an agency / employee.

Thrugelmir

£10k for a part time accountant sounds a lot of money. How many hours does she spend? 

neil5061

Thanks guys, what specific type of insurance do you mean?

MalMonroe

Thrugelmir said:

£10k for a part time accountant sounds a lot of money. How many hours does she spend? 

It's the OP's mother. I don't think that question has anything to do with the question that has been asked. And as someone who spent a lifetime in admin/accountancy, I don't think it's a lot at all. That kind of job always has been totally under-rated.

Ebe_Scrooge

neil5061 said:

Thanks guys, what specific type of insurance do you mean?

Professional indemnity is the obvious one.  So if she makes a mistake meaning the taxman chases you for a shed-load of unpaid tax and fines and interest and what-not, you can sue her for your financial losses, and her insurance will cover her.

MalMonroe

neil5061 said:

Hello all.
I am a locum doctor. My mother does all my administrative work i.e keeping track of expenses, tax returns, ensuring I am up to date with regulatory requirements etc.
I would like to pay her but not "employ" her. 
Would it be reasonable to pay her £10000 per year for this. 
Can she simply invoice me as a self employed accountant so that I simply pay her the 10000 and she deals with NI and tax when she files her return?
Thanks

Hi, for a part time admin job I think that salary is great. I'd do it! (Spent my working life doing secretarial and admin and am just about to launch my online business doing the same thing).

I think your idea is fine. In her own working life, your mother would then be both an employee and self-employed. Perfectly acceptable, my daughter does that. Your mum will just have to submit all her own tax returns, etc., as she does yours - and she's obviously au fait with the systems.

I don't see any problem with her working for you on a freelance, self employed basis, invoicing you for her work, then everything is recorded and it's all open and above-board as if you were an unrelated client. It doesn't matter that you are related, you can still work in that way. 

I don't understand why insurance would be necessary, I've never had it! Never needed it mind you but don't think it's necessary for this kind of job. Your mother sounds savvy enough and is already employed elsewhere. And when I looked at the government site for info on setting up as self-employed, no mention of insurance was made anywhere.

Good luck! But you won't need it.

Ebe_Scrooge

MalMonroe said:

I don't understand why insurance would be necessary, I've never had it! Never needed it mind you but don't think it's necessary for this kind of job. Your mother sounds savvy enough and is already employed elsewhere. And when I looked at the government site for info on setting up as self-employed, no mention of insurance was made anywhere.

Insurance is not compulsory - it's just a very good idea.  If someone employs an accountant, they usually trust that the accountant will take care of their tax affairs correctly, and will have no bother from HMRC.  If said accountant screws up, it's perfectly reasonable for the "employer" to expect the accountant to reimburse them for any financial losses.  If those losses run into several thousands, the only way most people would be able to pay that would be to have insurance.

So no, it's by no means compulsory, but it's very sensible, and pretty much standard practice for anyone who provides a professional service.  When I was self-employed I had insurance.  It cost peanuts because the likelihood and the potential scale of anything going wrong was small, but it was piece of mind.

Sea_Shell

I suppose you'd also need to weigh up what, if any, action you'd take against your mum, if she made a mistake that cost you £X's.

Even with insurance, you'd have to bring a claim against her, and the policy may have a substantial excess.