The short answer
- It depends on who the carer works forA self-employed carer is paid for a service. A carer your relative hires as their own employee is on a payroll. The tax answer is different for each.
- Self-employed: nothing for the family to declareThere is no payroll and no benefit in kind for you to report. The carer declares their own income to HMRC through Self Assessment.
- Employed: the room and meals are usually tax freeA law passed for home care workers exempts board and lodging on a reasonable scale. Your relative still has to run a payroll and meet the other duties of an employer.
- Council tax may fall, and one benefit needs checkingA live-in carer can be left out of the council tax count. Attendance Allowance is unaffected, but the severe disability addition to Pension Credit can be.
This is general information about the rules for England in 2026/27, taken from gov.uk, HMRC's own manuals and the legislation. It is not tax advice. Where your circumstances are unusual, or money depends on the answer, ask an accountant, HMRC or a free benefits adviser before you act.
The short answer
Two kinds of arrangement, with different answers
Every tax question about a live-in carer comes back to one thing: is the carer running their own business and selling a service to your relative, or are they your relative's employee? Once you know which, the rest follows.
A self-employed carer
How carers on PrimeCarers work, under the standard agreement
A carer your relative employs
A personal assistant hired directly, including one paid for with direct payments
Who is who
Your relative, or you on their behalf
A self-employed carer
A client paying for a service. Not an employer.
A carer your relative employs
The employer, with the duties that come with it.
Payroll
A self-employed carer
None. There is nothing to register and no payslip to produce.
A carer your relative employs
Register with HMRC before the first payday, run payroll and pay employer’s National Insurance.
The room and the meals
A bedroom in the house
A self-employed carer
Not a benefit in kind, because those rules only apply to employees.
A carer your relative employs
Free of income tax for a home care worker if it is on a reasonable scale.
Meals eaten in the house
A self-employed carer
Part of the household shop, with nothing for the family to report.
A carer your relative employs
Covered by the same home care worker exemption as the room.
Minimum wage
A self-employed carer
Does not apply. The carer sets their own rate.
A carer your relative employs
Applies. Only up to £11.10 a day for the room can count towards it, and food cannot count at all.
Telling HMRC
The carer’s income
A self-employed carer
Declared by the carer on their own Self Assessment return.
A carer your relative employs
Taxed through the payroll you run, before it is paid.
If the status is wrong
A self-employed carer
The standard agreement has the carer indemnify you for their tax, but HMRC looks at how the work happens.
A carer your relative employs
The question does not arise, because tax and National Insurance go through the payroll.
If you find a live-in carer through PrimeCarers, you are in the first column. Carers on PrimeCarers are self-employed, and the standard agreement between you and the carer says so: the carer is responsible for their own Income Tax and National Insurance, and nothing in it makes them your relative's employee. PrimeCarers is an introductory service. It introduces you to carers and processes the payments, but it is not a party to that agreement and it does not employ anybody who looks after your relative.
The second column is the family that recruits a carer directly and hires them as a personal assistant, sometimes paid for with a council direct payment. The government's guidance on employing someone to work in your home is plain about this: if you pay a carer or personal assistant directly, you are classed as their employer, even when a council or the NHS provides the money. The guide to personal assistants and direct payments covers that route in more detail.
A self-employed carer
With a self-employed carer, the family has nothing to report
If the carer is self-employed, your relative is their client in the same way they would be the client of a plumber or a gardener. That settles the question of who reports what to HMRC.
Your relative, or you
The client
The carer
Self-employed
PrimeCarers
An introductory service
HMRC
If in doubt
Benefits in kind are an idea from employment tax. When an employer gives an employee something other than wages, such as a car or a flat, the law can treat its value as extra pay, and the employer reports it. HMRC's Business Income Manual says there is no equivalent of those rules for people who work for themselves. So when a self-employed carer has a room in your relative's home, there is no benefit in kind form, and nothing for you to put through a payroll, because there is no payroll.
The same page explains how HMRC thinks about things a self-employed person receives that are not money. It cites an old case in which a bank required its agent to live in the bank house, and the courts held that the value of the house was not part of his income, because he could not turn it into money. The carer's own tax return is theirs to complete. If a carer is unsure whether anything about their room or board belongs on it, that is a question for them to take to their accountant or to HMRC, and it does not become a question for your family.
The food works the same way. A live-in carer shares meals with your relative from the household shop, and the usual extra to budget for is £5–£10 a day. Do live-in carers buy their own food? sets out how families handle the shopping. The room is not a tenancy either, and no rent is charged; does a live-in carer pay rent? explains why.
What your relative pays is the carer's weekly rate. Live-in carers on PrimeCarers charge £1,050 to £1,400 or more a week with our fee included, against around £1,400 a week through a typical agency. The cost of live-in care breaks down what that rate covers, and how much is a live-in carer paid? looks at it from the carer's side.
An employed carer
With an employed carer, the room and meals are usually tax free, and your relative takes on the duties of an employer
If your relative employs a live-in carer, the benefit in kind rules do apply in principle. Two exemptions in the tax law can take the room and meals out of tax, and a separate rule decides how much of the room counts towards the minimum wage.
The three rules that decide how a live-in employee's room and meals are treated
| What it covers | The test | What follows | |
|---|---|---|---|
| Board and lodging for a home care worker | A room and meals in the home of the person being cared for. | On a reasonable scale, at their home, and provided because of the job. HMRC tells its staff to take a common sense approach to what is reasonable. | No income tax, and the explanatory notes say National Insurance was changed to match. In force since 2016/17. |
| Job-related accommodation | Living accommodation, such as an annexe or flat where the carer could live independently. | Living there must be necessary for the proper performance of the duties. HMRC says the employee must show they need to live in that house and no other. | No tax on the accommodation if the test is met. HMRC’s published lists of employees who qualify do not name carers. |
| Minimum wage accommodation offset | Any room you provide, whether or not you charge for it. | Up to £11.10 a day, or £77.70 a week, from April 2026. | Only that much of the room’s value can count towards the minimum wage. Meals cannot be counted. |
Board and lodging for a home care worker
- What it covers
- A room and meals in the home of the person being cared for.
- The test
- On a reasonable scale, at their home, and provided because of the job. HMRC tells its staff to take a common sense approach to what is reasonable.
- What follows
- No income tax, and the explanatory notes say National Insurance was changed to match. In force since 2016/17.
Job-related accommodation
- What it covers
- Living accommodation, such as an annexe or flat where the carer could live independently.
- The test
- Living there must be necessary for the proper performance of the duties. HMRC says the employee must show they need to live in that house and no other.
- What follows
- No tax on the accommodation if the test is met. HMRC’s published lists of employees who qualify do not name carers.
Minimum wage accommodation offset
- What it covers
- Any room you provide, whether or not you charge for it.
- The test
- Up to £11.10 a day, or £77.70 a week, from April 2026.
- What follows
- Only that much of the room’s value can count towards the minimum wage. Meals cannot be counted.
Sources: section 306A and section 99 of the Income Tax (Earnings and Pensions) Act 2003, HMRC Employment Income Manual EIM50670 and EIM11341, and gov.uk on the minimum wage accommodation offset.
The first rule is the one written for this situation. Since 2016/17, section 306A of the Income Tax (Earnings and Pensions) Act 2003 has said that no income tax arises when somebody employed wholly or mainly to give personal care in the recipient's own home is given board or lodging there, on a reasonable scale, because of the job. It covers care needed because of old age, disability, illness or a mental disorder, which takes in most people who need a live-in carer. HMRC's manual at EIM50670 tells its own staff to take a common sense approach to what counts as reasonable.
The second rule matters if the carer has somewhere they could live independently, such as an annexe with its own kitchen. HMRC draws the line between board and lodging and "living accommodation" by asking whether the person could live a domestic life there without relying on others for basic needs. Living accommodation escapes tax if it is job-related, and the test HMRC sets out at EIM11341 is strict: the employee must show that they need to live in that house and no other to do the job properly. A live-in carer may well meet it, but carers are not on HMRC's published lists, so if your arrangement involves a self-contained annexe, ask HMRC or a payroll adviser before assuming.
Being an employer brings duties that have nothing to do with the room. The gov.uk guidance on employing somebody in your home lists them: check they have the right to work in the UK, take out employers' liability insurance, register with HMRC as an employer before the first payday, and run a payroll. The employee needs a contract, payslips and at least the National Minimum Wage, and may be entitled to sick pay and paid holiday. Anyone aged 22 or over earning at least £10,000 a year has to be put into a workplace pension. One piece of help is easy to miss: the Employment Allowance, which reduces the employer's National Insurance bill, is normally closed to domestic employers but can be claimed for a care or support worker.
Council tax and benefits
What a live-in carer can change for your relative's council tax and benefits
The carer's tax is one question. The other is whether having another adult living in the home changes anything your relative pays or receives. Most of it stays the same, and one benefit needs a closer look.
Council tax
Usually no change, sometimes a discount
Attendance Allowance and PIP
Not affected
The severe disability addition to Pension Credit
Worth £86.05 a week
Housing Benefit and Council Tax Reduction
Tell the council
Council tax is where a live-in carer can lower a bill. The gov.uk list of people who are disregarded for council tax includes a live-in carer for someone who is not their partner, spouse or child under 18. The regulations add that the carer must live in the same home, give at least 35 hours of care a week on average, and that your relative must be entitled to a qualifying benefit such as Attendance Allowance or the daily living part of PIP. Gov.uk says you have to apply for the discount even when somebody is disregarded. The funding guide on council tax, VAT relief, Pension Credit and grants explains this disregard, the separate one for paid care workers, and the reductions that can sit on top.
Pension Credit needs more care. The severe disability addition, worth £86.05 a week, is paid only if no other adult normally lives with your relative, apart from people the regulations tell the Department for Work and Pensions to ignore. If your relative already gets the addition, somebody who moves in to care for them is ignored for the first 12 weeks. The regulations also ignore a live-in carer engaged by a charity or voluntary organisation that charges for the care, but a carer arranged privately is not on that list. Whether a live-in carer on a rota counts as normally living there is decided on the facts, so report the change to the Pension Service, which asks to be told when people move in or out, and get a benefits check before the twelve weeks are up.
Checking and asking
How to settle the status question, and when to ask an accountant or HMRC
Most of this page turns on one fact, whether the carer is self-employed or employed. It is worth checking properly before the carer moves in, so the tax side is settled from the first day rather than sorted out later.
- 1
Decide which arrangement you want
Before you choose a carerA self-employed carer through PrimeCarers, or a personal assistant your relative employs. If a council or NHS budget is paying, ask what the budget allows before you choose. - 2
Check the status before you start
About ten minutesWrite down how the week will work: who sets the hours, who decides how tasks are done, who arranges cover. Then run HMRC’s status tool and keep the result with the agreement. - 3
Put the room and meals in writing
Moving-in dayNote which room is the carer’s, that meals are shared from the household shop, and that no rent is charged. It helps both of you, and if your relative is an employer it is the record of what was provided. - 4
Tell the council and the Pension Service
In the first weekAsk the council about the council tax disregard and any Housing Benefit or Council Tax Reduction. If your relative gets Pension Credit, report that somebody has moved in. - 5
Ask a professional where your case is unusual
When in doubtAn accountant or payroll adviser for employer questions, HMRC’s helplines for the rules, and a free benefits check for anything that touches Pension Credit.
HMRC's free tool, Check employment status for tax, asks how the work will be done and gives HMRC's view. Anyone can use it, including the carer, and HMRC says it will stand by the result as long as the information you gave stays accurate and follows its guidance. Save the answer with the agreement, and run it again if the arrangement changes in a way that matters, for example if the carer stops working for anyone else.
Ask an accountant or payroll adviser if your relative is going to be an employer, if the carer has a self-contained annexe, or if more than one carer shares the role. Ask HMRC's employer helpline if you want the rules confirmed before the first payday. A carer with a question about their own return can use HMRC's Self Assessment helpline, and TaxAid is a charity with a free tax helpline. For the benefits side, go to a benefits adviser rather than an accountant.
When the tax side is clear and you are ready to look, you can search for live-in carers near you and compare their weekly rates. Every carer has an online interview, an ID check, a right to work check and an enhanced DBS on the Update Service before they appear, and they are insured while they work. How do I hire a live-in carer? covers the steps from there.
Questions
Questions families ask about tax and live-in care
No. The room is not income for your family, so there is nothing for you to pay tax on. The question is only whether it counts as part of the carer's pay. For a self-employed carer there is no benefit in kind to report, and for a carer your relative employs, board and lodging in the home on a reasonable scale is exempt from income tax under a rule written for home care workers.
For an employed home care worker, no, provided it is on a reasonable scale, in the home of the person they care for, and given because of the job. That exemption has applied since 2016/17. For a self-employed carer the benefit in kind rules do not apply at all, because HMRC's manual says there is no equivalent of them for people who work for themselves.
Only if the carer is her employee. If the carer is self-employed and she pays for a service, she is a client and has no payroll to run. If she hires the carer directly as a personal assistant, including with a direct payment from the council, gov.uk says she is classed as the employer. HMRC looks at how the work is done rather than what the agreement says, so use its free status tool if you are unsure.
The carer does, through their own Self Assessment tax return. A sole trader who earns more than £1,000 in a tax year has to send one. The standard agreement on PrimeCarers says the carer is responsible for their own Income Tax and National Insurance, and your family does not report anything on their behalf.
It can reduce it. A live-in carer who gives at least 35 hours of care a week, where your dad gets a qualifying benefit such as Attendance Allowance, can be left out of the count of adults. If he is then the only adult counted, the bill carries a 25% discount. You have to apply to the council for it. Council tax discounts for carers has the detail.
Attendance Allowance and PIP are not affected. The one to check is the severe disability addition to Pension Credit, worth £86.05 a week, which depends on no other adult normally living with your relative. If your relative already gets it, a carer who moves in is ignored for the first 12 weeks, so report the change and get a free benefits check early.