For the last 7 years of my Mums life, she paid a woman £113 per week to care for her. should this lady pay tax

Question

My main reason for asking this is that I am aware that this lady and her husband fleeced my mother, and also basically ignored her during that time, despite the fact that my Mum bought her a new car to ferry her around, yet ended up taking the bus as this lady was always "on tour". If tax is due to Inland Revenue, I fully intend to report her, and I would like to know how

Answer 1

Well if the other woman had income even if from a pension, the money received from your mother would need to be added to it for a tax assessment.. It might be no tax was due, but it should still be declared,,, How you wpuld go about instigating an enquiry I m not sure.. Could ask the local tax office I suppose...

Answer 2

It depends on how much she earns in a year, so one would have to take into account any other income she was earning in addition to what your Mum was paying her. You ware allowed to earn up to a certain amount before you are liable fo tax, I believe the threshold is aorund £100 a week, so it's sounds as if she should have been paying a little tax, but not very much at all. Try giving the Inland Revenue a call - they'd be the ones to speak to if you want to report her as well. But I would imagine you'll need some form of proof that your Mum was paying her this money.

Answer 3

Yes, this income was taxable, but the bad news is that your mother, as her employer, was responsible for deducting tax and NIC and paying it over to HMRC. I think you would be best leaving well alone.
EDIT: There does not have to be a written contract to make someone an employee - if you offer someone work and they turn up and carry out that work and you pay them, that constitutes a contract in UK law. As an example, see the multitude of questions on here where people have employment probs and say they have no written contracts!
Could this woman send someone else to do the work? Was she risking her own money to carry out the work? Did she provide premises and equipment? NO - the employer here even bought her a car! Could she have made a loss? these are all badges of trade, not self employment.

Answer 4

Did the woman have other income? If that was all she made in America she would have to file but probably wouldn't owe anything because she didn't make enough. Who's name was the car in? There might be a gift tax on it if it was put in the caretaker's name.

Also, in the states, the employer is responsible for matching the employee's unemployment insurance and I think some other taxes so be aware that if you report this woman they could come after your mum to claim the taxes your mum owes as well.

Answer 5

There would be some minimal tax due on that amount, assuming that was her only income. However the case could be made for the car being a benefit in kind, and taxable.

Fengirl: Surely not - most workers of this kind are treated as self employed, and are responsible for their own tax affairs. I very much doubt there was any contract of employment between them!!!

Answer 6

I believe you are allowed to earn just over £5,000 a year before you have to pay income tax, but I would check this with the Inland Revenue. Your nearest office would be in yellow pages.

Answer 7

Hello Hugh,

She may not be earning enough to pay tax but she has a legal obligation to declare the income she gets from your mother.

It is then for the Inland Revenue to decide if she is eligible to pay tax.

If this person has another income as well as the money she is getting from your mother she is very likely to have to pay.

This woman and her husband certainly do not appear to be the nicest people to know, so I would not have the smallest thought of remorse when reporting her. If she owes tax, she should pay it.

Before reporting her, you could of course speak to your local Citizens Advice Bureau (CAB). They will be able to advise and help you.

The CAB is a free and highly confidential service who I know will be able to advise.

Good luck .

Poseidon

Answer 8

The personal tax allowance for this tax year is £5,225. For married couples it is £6,285. So depending on how many weeks of the year this woman has worked she may or may not be over the threshold.
She may of course be providing this "service" for others and may be making more on the side.

You can always report her anonymously to the HMRC. If she's got nothing to hide then she's got nothing to worry about. On the other hand........

I've put the sources below for the tax allowance and the anon. Tax Evasion Hotline.

Answer 9

First ask your mother if she paid her according to the minimum wage law,if not reporting her will also put your Mom in trouble.If you wanted to report go to the tax revenue office or call the tax revenue office and they have a special team for that.Success

Answer 10

You could be getting into difficulties here with the tax office. If your mother employed this woman directly, she was effectively her employer and should have been making PAYE and NI deductions. However the woman should still have made a tax return if she had untaxed income.

This link tells you about PAYE ...
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/WorkingAndPayingTax/DG_10027015