When you begin working with a private client, you may be classed as self-employed. The definition is constantly changing to accommodate new business models, so it is important that you check what you are classed as yourself. If you work for multiple clients, can set your own wage and are not supervised then, at the time of writing, you are probably self-employed so will need to know how to handle tax and money responsibly, as a self-employed private carer. Stay up-to-date by reviewing government guidance here.
This can have plenty of benefits, including more flexibility and control. But it also means you’re in charge of your own money and finances. This includes checking your earnings, submitting tax returns, expenses and ensuring you’re compliant with the HMRC.
This might seem like a lot of work, but if you have the right steps in place then it’s easier than you’d expect. Managing money and being a responsible self-employed carer and taxpayer doesn’t have to be difficult.
Registering with HMRC
The first thing you need to do once you become a carer with us is to inform HMRC that you’re working as a self-employed carer. To do this, you should register for a Self Assessment. This is the system HMRC uses to collect income tax if you earn more than £12,500 from self-employment in a year (in 2019/20).
For normal employment, tax is usually deducted automatically from wages. But as a self-employed worker, you need to report your own income and tax returns. This system allows you to do so.
You need to register by 5th October after the end of the tax year during which you became self-employed. So if you started working for a client privately, on the 15th of August 2019, then you’ll have until the 5th of October 2020 to register. It’s always best to register as soon as you’ve started working, so you don’t forget and risk penalties.
If you have other jobs where your employer pays you through PAYE, you won’t need to report these in your Self Assessment. At the end of the tax year (6th April), HMRC will group everything together to determine how much tax and national insurance you need to pay.
Keeping track of your earnings
You must keep track of all your payments diligently to be used to fill out your end of year Self-Assessment. If you are working with a platform, like PrimeCarers, the information you’ll need will be found in your account. This records all your payments, before tax, so it’s easier to keep tabs on the money you’ve made. It’s easy to access at any time from your dashboard, so you always know what you’ve been paid.
Just remember to keep some money leftover to pay for taxes at the end of the year.
Handling your expenses
You should keep receipts for any expenses you pay out while working, or in relation to work. This might include travel, petrol, lunch or shoes, gloves, and aprons. If you are working through a platform like PrimeCarers, you may be able to claim part of your phone contract. You can claim back tax on some of these, which can be useful for offsetting costs. Further information can be found here.
By keeping on top of the things you’re expected to do as a self-employed worker, you can stop worrying about finances. You can then focus on providing great care to your clients.
If you want to understand more about your responsibilities as a self-employed carer, HMRC has some great advice. You can also call them on 0300 200 3300 for more advice and assistance.
For more information, visit the Money Advice Service.