11.. Registering as a Small Employer
The most effective use of direct payments for an individual, in almost every case, is through an employer/employee relationship whereby the direct payment user or/and advocate for that person employs personal assistants directly. And though for most people, it is an unfamiliar situation which they reluctantly take on, the overwhelming majority quickly get the hang of things, and never look back !
If you are someone who falls into that category, don’t worry ! You are not the first person coming to direct payments who has said, ‘but why do I have to be an employer ?’ There are many reasons why this situation – you being the employer – throws advantages your way.
But, the first answer to the question in italics above is that you do not have to be an employer. Nobody forces you, and it is not a contractual agreement you must make with the Local Authority. There are routes you can pursue whereby you do not have to be an employer but that will depend on you finding people who can provide you with the services you need for the amount of money you can afford, and in such a way that you can demonstrate what you are doing is legal.
For example:
· You will have to find an organisation or agency whose rates are low enough for you to pay them directly via an invoice for their services.
· You will have to accept their conditions, their staff and any changes they might want to impose on you.
· On the other hand, you might look for someone who would provide the services you need as a personal assistant who could demonstrate that they were self-employed.
· You wouldn’t be involved in the processes and paperwork which an employer has to follow, but you will have to have evidence from the Inland Revenue to show your Local Authority of self-employed status on the part of the personal assistant. This is uncommon.
In both cases, you have a hard task when you want to find someone to work the specific hours that you have available, at the times you want and with some measure of continuity and regularity in the person you see. So, when your Local Authority agrees to give you direct payments to purchase your own care and support, you are not forced to be an ‘employer’ – but you’ll probably find it’s the best way.
Think:
Turning to private supplies, such as agencies, very soon, you will find that purchasing care becomes a costly business. The money you receive as a direct payment just does not go far enough. This is easily understood because the agency wants to make a profit, and therefore the cost of the care arrangements covers the wages they pay their staff and the profit and costs involved in running their business.
‘Employing people yourself cuts out the middleman, where profit is made, and you get more for your money !’
First steps to becoming a ‘small employer’
The Inland Revenue have a well established procedure for starting people up as small employers. The phrase ‘small employer’ means exactly what it implies, in that you will not be a large employer with many staff to consider. On the contrary, you will have relatively few staff. This means that the Inland Revenue can adopt special rules for you in order to make many things simpler and less inconvenient.
If you use the C.I.L. for your support, we will contact the Inland Revenue on your behalf in the first instance. We will do this before you actually commence using direct payments. It is generally done when you have successfully recruited personal assistants, so that you are in a position to decide on a start date.
The C.I.L. will provide the Inland Revenue with your name and address, and inform them that you will be employing personal assistants from the given start date which you decided upon above. This means you will be registered with the Inland Revenue from that time onwards. Most correspondence from the Inland Revenue will be sent to the C.I.L. if we support you with your payroll, from time to time some mail might be sent direct to you.
What is involved ?
The Inland Revenue will supply you with a unique number which is your employer’s reference number. You will get to know this very well because it will be on all the letters and booklets you get from the Inland Revenue. It is a number you will quote if you want help or support from them. It is a number we will keep with your confidential information, if you use the C.I.L. payroll system because we will have to quote it to when dealing with the Inland Revenue.
You will also be given a payment reference number which will appear on a payment book which will be sent out by the Inland Revenue. Everyone who employs staff is sent one of these yellow payment books. We will receive it for you if you use our payroll service. It is used by the employer to pay in any deductions which are made from an employee’s wages. These deductions can be income tax, national insurance contributions both from the employee and the employer.
Registering as an employer is as simple as that. If you use our payroll service, the C.I.L. telephones on your behalf. When the C.I.L. contacts them we inform them that we will be providing you with a payroll service therefore you will not need their business team to visit you and instruct you in or offer you courses on working out tax and national insurance deductions. If you want to operate your own payroll, you will need to telephone them directly yourself.
What are your duties and responsibilities ?
1.
As an employer, you have a legal duty to employ people within the framework of the law. That means you must respect certain employment rights of your employees and you must fulfil your statutory duties to make deductions and pay these regularly to the Inland Revenue.
2.
The C.I.L. payroll service takes much of this
strain away from you. However, the paying-in
book is still your responsibility and the payment
of money deducted from your personal assistants
must be paid in by using this book at least every quarter (13 weeks). The Inland Revenue will allow small employers to make these payments on a quarterly basis, whereas other employers, such as those with larger care packages e.g. with I.L.F. funding, often pay them in on a monthly basis.
3.
You must tell the Inland Revenue who you are employing. When doing this you must send them the correct form signed by a new employee which tells the Inland Revenue something about their past employment – the C.I.L. will tell you whether this should be a P45 or a P46. And when the Inland Revenue tell you to alter details, such as a tax code, for your employee then you must follow their instructions.
4.
At the end of each financial year (the first week in April), you have the responsibility of sending the Inland Revenue what are known as the end of year returns. These are the figures for the total amount of money earned by your employees during the year and the total amount of deductions taken. Once again, by using the C.I.L. payroll service, this kind of paperwork can be done for you.
5.
As an employer you might be faced with other irregular circumstances, such as having to pay Statutory Sick Pay (S.S.P.), Statutory Maternity Pay (S.M.P.), Working Families or Students Tax Credits, etc. They will not necessarily cause you any bother because if they occur you can telephone a Direct Payment Advisor or the Payroll Officer at the CI.L. who will help you sort things out. If you use the C.I.L. payroll service this happens anyway. Nevertheless, you must recognise that you will have a legal responsibility to deal with them and they can’t be ignored.
You will also get newsletters, information leaflets, reminders, offers of courses, etc. It’s not exactly ‘junk mail’ but neither should you be worried by it, for it goes out to everyone and some people might be employing people with no support service backing them. If you respect the 5 points above and keep in touch with the C.I.L., or anyone else providing you with payroll support, all will go well – and you will not have a headache over paperwork !!!
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