Not such a grey area

If you’re a dentist concentrating on your career and expanding your practice, it’s unlikely you’ll have much time to spare for domestic chores or gardening alongside creating and sharing quality family time. 

However, a background of household muddle is not conducive to efficiency at work or to an acceptable quality of family life, and you may need to hire some help to keep things in order.

The age old ‘cash in hand’ system of paying for home help is not always as straightforward as it seems, and you should establish from the outset whether your cleaner or gardener is your employee or is self-employed.

Self-employed usually means that workers supply their own tools and materials, and correct any mistakes or unsatisfactory work in their own time and at their own expense. They would also normally be paid a fixed fee rather than an hourly rate, so they can show a profit or loss on the arrangement for tax purposes. 

Your worker is generally classed as an employee by HMRC if they are not running their own business, you tell them exactly what to do, when and how to do it and supply the necessary tools and materials, they work the same hours each week, they cannot delegate the work to someone else, and you continue to pay them when you are away, on holiday for example.

As an employee your home help must be paid at least the National Minimum Wage and you must report their earnings to HMRC using its new PAYE Real Time Reporting System. Employees also enjoy statutory rights in respect of unfair dismissal, redundancy and holiday pay, and in many cases the employer now has a duty to offer a pension scheme.

The third option of course, would be to use an agency, as the agency worker is not directly employed by you, and the potential hassle and liabilities of you being the direct paymaster ceases to be relevant. This alternative has the advantage that should you feel the work is unsatisfactory, or for any reason you are not happy with your new cleaner for whatever reason the agency will offer a replacement.

Everyone’s domestic circumstances are different, but the taxation rules are indifferent; a dispute with HMRC over how you pay your home cleaner could prove costly as well as inconvenient. If in doubt, consult your accountant!

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