What’s the Difference Between an Employed and Self-Employed PA?
When someone is considering becoming a Personal Assistant (PA) employer it is important to understand the difference between an employee and a self-employed worker. A worker’s employment status can affect the legal relationship and financial responsibilities between the PA Employer and that worker. So for example, a PA Employer would be responsible for paying the tax and National Insurance for the PA(s) they employed, whilst a self employed worker would be responsible for paying this themselves.
This is something that all PA Employers need to be aware of. To help understand this, there are some basic definitions of different employment statuses that a PA could have.
When a PA is an employee
- A PA who has a Contract of Employment is an employee
- The PA Employer is required to offer the PA work under the terms of the contract
- The PA is required to accept the work offered under the terms of the contract
- The PA must perform their work personally and cannot send a someone else to do this instead of them
- The PA will be working under the control and direction of the PA Employer
- The PA will be provided (by the PA Employer) with any equipment they need to enable them to fulfil their role as a PA
- The PA is paid through Pay As You Earn (PAYE) and National Insurance payments will be made on their behalf by the PA Employer
- The PA will receive statutory benefits, such as statutory sick pay
- The will be entitled to holiday pay
- The PA will be subject to the disciplinary procedures set up by the PA Employer
It may be that the relationship you intend having with the worker is better described under a casual work agreement.
The term casual worker applies to PAs who provide assistance or support their employer on a temporary or ad hoc basis. Temporary/ad hoc work is defined as being:
- Work which occurs only once, and for a short period of time
- Work which occurs more often but on an unpredictable or irregular way
- Work where there is no obligation on the part of the PA Employer to offer the work (e.g. there is no contract between the two people)
- Work where there is no obligation on the part of the PA to accept the offer of work (e.g. there is no contract between the two people)
- Workers are entitled to a written statement of the terms of their engagement
Where there is no written contract of employment
In situations where there is no written contract of employment, such as when you’re asking a PA to work now and again at different times on a casual basis, there may be no requirement for the PA Employer to offer work and no requirement for the PA to accept any work.
If however, a casual worker’s working pattern becomes, over time, set and regular, then this arrangement would have to be reconsidered as they may be regarded as a permanent employee. A casual worker’s working periods should consist of short, irregular work with gaps in between so that a continuity of employment is not established.
Having casual workers available can really help a PA Employer manage gaps in their PAs capacity, such at times of sick leave or holidays. However, it is important to understand when casual work becomes employment and what a PA Employers responsibilities are if this happens. It is helpful for some PA Employers to have several casual workers available for them to approach to cover holidays and unscheduled emergencies.
Working out if a PA is self-employed or not
There are two areas to consider when trying to work out whether a PA is a self-employed worker or not. These relate to:
- Employment status for tax purposes
- Employment status for work purposes
HMRC have outlined certain questions to help decide if a worker is self-employed for tax purposes. If the worker can answer yes to one or more of these questions, they are likely to be self-employed:
- Can the PA hire someone to do the work for them, or take on helpers at your their expense?
- Can the PA decide where to provide the support needed, when to work, how to work and what to do?
- Can the PA make a loss as well as a profit?
- Does the PA agree to do a job for a fixed price regardless of how long the job may take?
If the PA cannot answer yes to any of the questions above, they are still likely to be self-employed if most of their answers to the following questions are yes:
- Does the PA risk their own money?
- Does the PA provide the main items of equipment (not the tools that many employees provide for themselves) needed to do the job?
- Does the PA regularly work for a number of different people and require business set up in order to do so?
- Does the PA have to correct unsatisfactory work in their own time and at your own expense?
Take a look at the article on self-employment and also the HMRC webpage on UK Government check employment status for tax purposes.