MOTHER´S HELP - Employing someone to help you - your legal responsibilities

When you employ a mother's help in the UK you become an employer and you will have to comply with the same laws and regulations that commercial employers do.

Remember, people who are self-employed- such as childminders and maternity nurses, do not require the same legal responsibilities.

Registering as an employer with HMRC

You will need to register as an employer with Her Majesty's Revenue and Customs (HMRC). They will send you an information pack which will enable you to register.

You will need to provide them with your details, what you are employing the person for and the money you intend to pay them. You can register by email or telephone – more details are available on the HMRC website (www.hmrc.gov.uk).

PAYE, Payroll and Payslips

You will need to pay your employee through Pay As You Earn (PAYE) if your employee earns over £95 per week. This means you will record and register what you pay them including salary, overtime payments, sickness payments, expenses and bonuses.

If they earn between £95 and £110 per week, you will need to complete a PAYE Deductions Working Sheet to show how much you pay them, as this will count towards their pension.

If your employee has another job, you will need to use PAYE no matter what they earn.

If the employee earns less than £160 per week or £700 per month, you can operate a Simplified PAYE scheme which doesn't involve as many forms.

When you register as an employer with HMRC they will send you a pack with PAYE forms and information about running a PAYE scheme, including the simplified scheme. You can also complete the forms online.

You will need to provide your employee with payslips that break down exactly what you have paid them and any deductions from their wages. At the end of the tax year you will need to provide them with a P60 that summarises their annual earnings in their role. This should be in paper format and given to them before 1st June. The only reason you would not give them a P60 is if they earn less than the National Insurance Lower Earning Limit.

If you don't want to operate the PAYE scheme yourself, you can hire the services of a payroll agency to do it for you.

Income Tax and National Insurance Contributions (NI)

You will need to pay Income Tax and National Insurance Contributions (NI) when you employ someone in your home.

As part of your PAYE scheme you will need to deduct both Income Tax and NI from the employee's wages. This will need to be displayed on their payslip.

HMRC will provide the employee with a tax code and this will determine the amount that you will deduct. The P60 at the end of the year will show the total Income Tax and NI amounts paid.

Guidance from the HMRC will enable you to work out the deductions you will need to make. A payroll agency can provide this service if you do not want to manage it yourself.

Employer's National Insurance Contributions (NI)

As well as your employee's Income Tax and NIC deductions, you will also have to pay Employer's National Insurance Contributions. There are different levels of NI for employers, based upon your employee's earnings and any benefits, expenses and other payments. HMRC will provide guidance on the amount you will need to pay.

Annual Summary

The P60 form that you are required to give your employee at the end of every tax year will provide an annual summary of their earnings and deductions.

You must also complete an annual return every year that records your employees and deductions for the year.

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