Local church has a cleaner and paying her weekly £50 per week . The church is not a registered charity but has an annual independent report . What information is the church required to obtain from the cleaner to prove she is self employed so as to avoid registering for PAYE ? Or can they just draw up a contract stating cleaner responsible for her taxes ?
Thanks
Replies (20)
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When you say 'prove' she is self employed, you can't prove something that is untrue.
The facts of the case dictate whether the cleaner is employed or self employed.
What leads you to conclude he/she is self employed?
We may then be able to advise further.
So ...
She carries out the cleaning when she wants to but uses the church equipment and cleaning materials. She does have another business but not cleaning .
As the church does not appear to have a PAYE scheme at present, I assume that the cleaner is the only potential employee.
As she uses the church equipment and materials, I think she is more likely to be an employee of the church than self-employed.
As you say she has another business, I assume that it is a self-employment rather than another employment. If so, as Novakova has set out very clearly, she can be treated as an employee being paid less than the NI LEL of £111 a week, so no PAYE scheme is required. Just get her to sign a Starter Checklist to say that she has no other (employed) job and keep the form on file.
Employee
She carries out the cleaning when she wants to but uses the church equipment and cleaning materials. She does have another business but not cleaning .
Agree with Euan - she's an employee, isn't she ? What happens when she's on holiday ? Do the church get someone else ? Or does the cleaner bring on a sub ? If it's the cleaner .... do the church pay the original cleaner or the sub ?
Answer those questions and follow the logic and it'll all become clear.
e'ee or not?
I think it's uncertain whether the cleaner is an employee or not, say a 50:50 call. If I was presented with this case, I certainly wouldn't rush to conclude that it was employment.
Just my view.
She's an employee
Since she uses their equipment and supplies she's an employee at least by U.S.A. standards
Look at the facts.
I have a cleaner to clean my holiday let after each rental. She is self employed. I am confident that this is the case, because:
- she provides her own cleaning materials and equipment (e.g. vacuum cleaner, mops)
- she often brings people to help her with her work, and occasionally sends a substitute cleaner if she cannot come herself
- being a holiday let, the time at which she can clean is reasonably fixed, as it must necessarily be between guests, but she has complete control over when she turns up between those hours.
These are the sorts of facts you need to look at in determining whether the church's cleaner is employed or self employed.
Cleaners wages at small church
Cleaners (unless there is a contract of service, usually taken as meaning the cleaner working through some agency or Ltd company), are normally treated as employees:
www.hmrc.gov.uk/manuals/esmmanual/esm4018.htm
An employer is exempt from operating PAYE if none of his employees is paid £111 or more a week, gets expenses and benefits, has another job or gets a pension. If the cleaner does not give you a form P45 re leaving a previous job, a starter checklist should be completed:
www.hmrc.gov.uk/forms/starterchecklist.pdf
If the church has to run payroll, you should register with HMRC as an employer, and make reports to HMRC of payments made under the RTI
www.gov.uk/paye-for-employers/paye-and-payroll
An accountant already operating RTI etc. should be able to do the registration and weekly reporting for you for a small fee.
Until 6 February 2015 small employers can report late penalty-free.
I can say with certainty
That she is an employed earner for NIC purposes, as has already been pointed out. It is all a bit of a wet fart (I think I may mean damp squib) though, given the amount that she is being paid.
The easier option
When I said in my earlier comment that "she can be treated as an employee", I meant to imply that even if there is some doubt (50:50 or otherwise), it would not be unreasonable to treat her as an employee and as that is also the easier option (just get her to complete a Starter Checklist, but do nothing else), it was the obvious solution. Now that the oracle has confirmed it, just get on with it.
Cleaners wages at small church
Those who are uncertain may wish to try the HMRC employment indicator tool at:
www.hmrc.gov.uk/employment-status/
The cleaner will be entitled to paid holidays; entitlement calculator is at:
www.gov.uk/holiday-entitlement-rights
but not to Statutory Sick Pay, Statutory Maternity pay etc.; see information on this at gov.uk.
But please note that HMRC had drastic staff cuts and don’t do as much work as they used to.
What I would do in this case?
The cleaner has another business and will be required to complete a self assessment return.
Based on that, she is liable to pay tax on any additional income she receives by declaring that on her SA return.
It's a small church and £50 a week is £2,600 for a year. Assuming no other employees are paid over the NI threshold of approximately £7,900 per annum, the church does not need to report anything to HMRC or register for PAYE
Slightly off topic...
A bit of an aside - but still relevant to the original question - what happens where you take somebody on in good faith below the LEL, starter checklist completed etc, maintain evidence of payments and so on, but don't operate PAYE as you aren't required to, but then the employee gets a second job/pension etc?
Is the onus on the employer to regularly check the status of the employee (you'd probably be aware if they take on another job, but they might not think to mention if for example a pension had started paying out), or can you stick with the original position?
No, I don't think the onus is on the employer to regularly check the status employees. I presume you would have requested for a P45 when the employee started.
If the employee needs to pay more tax due to a second job, they will be liable for that and not the employer.
Minister
If the church already has a paid minister then they will already be running a payroll for him/her. In that case, the cleaner will have to be added on to the payroll even though there will be no tax or NI to deduct.
Employee status
The employer needs to check the nature of the relationship with the 'employee' to determine whether it is an agreement 'of service' or for services'. What the person does elsewhere should not affect how they are treated in this case, surely.
Get a waiver from HMRC
I've done this in a similar case to this. The cleaner (my client) was in the SA system and HMRC were quite happy to allow the church not to have to register for PAYE but to treat the cleaner as self employed. (maybe I got a sensible member of HMRC staff (they do sometimes appear!))
i pay a church clenaer
she is mosr definitely an employee by virtue of the contract. If she had no other job though I would still not have set up a PAYE scheme as she would be the only employee and paid under the LEL, however she is a pensioner so has a BR tax code and therefore the fact a code has been issued by HMRC requires a PAYE scheme to be in existence and for the wages to be taxed. I';m not sure about all churches but as a methodist church we do not employ the minister locally he is employed by the overarching church not the individual trustees so his presence is a red herring in terms of RTI compliance
Church Hall Cleaner/caretaker
Our church hall cleaner and secretary left last May so we are running without paid staff at present. Since Sept we have a voluntary cleaner (aged 20) Can we make a Christmas gift of say £100 to him without him having to pay tax?. He has a part time cleaning job at the primary school for which he is paid.
He is good and we would like to start paying say £100 a month as a gesture. How can we do this legally?