Have they provided you with a contract of services or Service Level Agreement? Do they invoice you for work carried out? Do they have their own insurance and their business?
It’s important that you are aware of the answers to these questions as this could have implications for you…
As the person paying for the work, it is important for you to determine the employment status of your Personal Assistant.
If you think your Personal Assistant is self-employed but later is judged to be directly employed by you, you could face significant payments due to HM Revenue and Customs. As the employer, you are directly responsible for deducting PAYE and National Insurance contributions, where appropriate.
It is important to establish the nature of the relationship as soon as possible. There are a few main indicators as to the nature of the relationship but this can still sometimes be difficult to determine as the HMRC and employment law will look at any given situation from a number of perspectives.
By not establishing the nature of your working relationship, you run the risk of being legally challenged by your Personal Assistant for not providing them with their statutory entitlements.
It is important to note that only a tribunal or court can make the final judgement on the status of any contested working relationship.
The following, although not definitive, are a good indication of self-employment:
- Have you been given a Service Level Agreement by your Personal Assistant? This contract should specify services provided and set charges for these services. This contract of services, should, as far as possible, avoid terms indicating employment, such as holiday entitlements, sickness and disciplinary measures.
- The wording used within a Service Level Agreement is very important. The Personal Assistant should not be referred to as an employee or worker. Employee would imply an employment relationship and the term worker could be too ambiguous. Terms such as salary should also not appear. While the wording of any contract for services is important, it is not definitive or decisive – a tribunal would make the final determination.
- If there is no “mutuality of obligations” as defined by employment law then the Personal Assistant is probably self-employed. No “mutuality of obligations” means that the Personal Assistant has no strict obligation to their client and can accept or reject work on their terms not the clients. Generally speaking, the less control a client has over a Personal Assistant the more likely that Personal Assistant would be considered self-employed along with the aforementioned conditions.
- There is no “mutuality of obligations” (see information page above: Indicators of Employment), and the client/employer has little or no control over the worker. In this case, the worker is more likely to be regarded as self-employed.
Some last decisive factors include:
Are they, the Personal Assistant, in business for themselves?
Do they provide their own tools and materials? Their own cleaning supplies for example?
Do they use their own money to cover any costs of providing the service to you? Or do they at least invoice you for these costs?
Do they pay someone else to provide cover when they are unavailable to provide the service themselves?
Do they, the Personal Assistant, remedy any unsatisfactory work in their own time and at their own expense?
If the answer to any of the above is yes, then your Personal Assistant would likely be considered to be self-employed but it is imperative to stress that only a tribunal or court of law can make this judgement regarding a working relationship.
Here is the HMRC Employment Status Indicator:
The news article below discusses a case where despite being VAT-registered and paying self-employed tax, he was entitled to workers’ rights, the court ruled, this clearly shows some of the risks involved: https://www.bbc.co.uk/news/business-44465639