Paying Tax and National Insurance

These information sheets have been provided as a guide only and should not be used as substitutes for specialist advice. We try to keep them updated, however, this cannot always be guaranteed.

If you pay a Personal Assistant, it is your responsibility to ensure you deduct any tax and National Insurance due from their wages or salary and pay it to H M Revenue and Customs, together with any Employers National Insurance due.

For current tax and national insurance rates click here

New Employees
When a new employee starts they should give you a P45, which gives details of their previous employment. They should give you two parts of the P45. If they do not have a P45, you should ask them to complete a form P46 (unless they are working for you for less than one week). If the employee earns less than the tax threshold in all their jobs there will be no tax and if they earn less than the NI threshold in their employment with you there will be no national insurance. (If an employee has more than one employment you may need to deduct tax from them, even if you pay them less than the earnings threshold).

Speak to HM Revenue and Customs or Compass Disability Service if you need further advise. If you do not deduct tax and national insurance when it is due, HM Revenue and Customs can claim it from you at a later date, together with interest and penalties.

Compass Disability Service offer a payroll service if you would rather we did these calculations for you. If you are using a Personal Health Budget in Somerset, this is automatically provided.

National Insurance numbers
You should always ask your employee for their NI number. (It should be on the P45 or P46). If they do not have one they should contact their local Job Centre Plus office.

Paying Self Employed Personal Assistants
Your Personal Assistant cannot just elect to be self-employed.  This is decided by the local tax office depending upon the facts of the employment relationship. It is very rare for them to agree that a personal assistant is self employed.

For more information on this subject ring the New Employers Advice Line 0845 6070143. Or check this on the status indicator on the HM Revenue and Customs website

Your advisor can help you with any of this.