It was my worst nightmare. Establish a payroll, sort out vacations and taxes and national insurance for other people. Become an employer.
But that’s what it was. At 93, my mother, Marje, was no longer able to support herself but she did not want to leave Manchester to live with me or my sister in London; she also didn’t want to live in a nursing home.
We heard of two wonderful caregivers who between them could care for her full time in her own home. But my sister and I couldn’t keep pulling out huge wads of cash to pay for them. We look like money launderers. As a financially phobic person – and I asked Martin Lewis for help on this – the last thing I wanted was to do anything fishy.
So, with the help of an accountant, I established a payroll to pay for mom’s care. Like so many people who do this with no experience of running anything vaguely commercial, I was beside myself and I knew it.
One thing I had resolved was that I had to pay caregiver income tax. I also assumed that I had plenty of time to pay for it. Enter HM Revenue and Customs.
I had only set up payroll last October but in February, March and April I received letters asking for “late payments”. I assumed this was a mistake as I had only been an employer for a few months. Like I said, I was overwhelmed. I assumed it would be the same as being self-employed and I would start paying tax the following year.
I checked with my accountant on April 20, who told me it was for real and I owed £3,069 to HMRC. I didn’t need to pay it all at once, but being paranoid I thought I’d get rid of it. The money was paid on April 22. Work done.
Only it wasn’t. In mid-May I received a chilling letter from a company called BPO Collections saying it was time to pay the unpaid tax of £107.44. BPO Collections explained: ‘We are a team of debt collection specialists…we have been asked by our client HM Revenue and Customs to contact you regarding the balance above which is your unpaid PAYE tax.’
I phoned BPO Collections in a panic. “You have to stop this,” I said. “I paid the money.” “I can’t,” they said. “Only HMRC can do that.” “But check the records, you’ll see I paid,” I said. “We don’t have access to what has been paid. Our job is simply to collect the outstanding debt. “Even if it’s not exceptional?” They said they were just following HMRC instructions and would give me two weeks grace.
My panic levels were rising. I phoned HMRC and was kept on the line for ages. Eventually an officer responded. I told him that BPO Collections had said they could only remove me from their hit list if HMRC asked them to. “BPO collections? ” she says. “Never heard of them.” She went to check. “No, I’m afraid BPO Collections doesn’t exist. It looks like you have been scammed. They look pretty real to me, I said. No, she insisted, not real, and HMRC never comes for people after a few months anyway. “We don’t do anything for years,” she says.
Eventually she told me she couldn’t resist putting me in touch with someone who could. At that time my daughter Maya had found a government website showing BPO Collections as one of HMRC’s authorized debt collection agencies.
Agent two admitted that BPO was indeed collecting the unpaid tax and that I was not scammed. He said he should put me in touch with a third officer. Another wait. It was like I was going somewhere with officer three when the line cut.
At that time, I was stressed and seriously pissed off. I had lost so much time and was still being chased by the heavyweights. I couldn’t bear to go through it all again. So I phoned the press office and told them I was writing an article about it and asked a series of questions.
I remarked that I had been lucky – I was able to call the press office because I am a journalist. What if it was my mom trying to figure out why she was being threatened by debt collection agencies after she paid her taxes?
The press secretary said someone from HMRC’s complaints team would call back the following day. Of course, Mrs. Monotone made contact. “Unfortunately, a mistake was made,” she said.
Although the payment disappeared from my account on April 22, Ms Monotone explained that the payment was not processed until April 26, and earlier that day HMRC had told BPO to take over. Within six months of becoming an employer – and having paid all unpaid tax – HMRC had called in their team of hitmen.
I was confused. My letter from BPO Collections was dated 5th May which meant HMRC had had two weeks since I paid and nine days since it was registered to cancel BPO.
Ms. Monotone from Complaints explained that I had been unlucky in how the dates fell and unfortunately the system is automated.
She apologized for Agent One’s misinformation that BPO did not exist and that HMRC had not sent debt collectors for years.
What about the tone of the letter and the terrifying message on the website – the threats of a home visit, the promise: “We will always warn you and offer you the opportunity to pay what you owe before remove any of your property”?
“Obviously, collection agencies are written to make customers react. They can be quite a pain when you get that letter tone,” Ms. Monotone acknowledged. “It’s not meant to scare off real customers, it’s more to encourage other customers who wouldn’t respond without this little nudge.” But she had just admitted that HMRC didn’t know the difference between tax avoidance giants and people like me because the system is automated.
I had been trampled on by HMRC because I was now an employer rather than someone trying to do my best for her elderly mother. There are so many things that could be easily fixed here, I told Ms. Monotone. “If you have a few people at HMRC looking after the many people who have set up ‘businesses’ to care for themselves or their loved ones, that would be a start. If your letters were not automated. If you get on the fan to the heavyweights as soon as you receive our payment to cancel them. If you care enough about us not to scare us into imposing debt collectors on us when we don’t owe money in the first place.
She said for the third time: ‘Unfortunately for real customers it can be quite scary and I understand that. She promised to pass on my ideas, but the problem was that HMRC had no resources.
‘You know you are recording the calls, please pass on the recording of this conversation, so the big cheeses at HMRC can think of making sure this doesn’t happen again.’
“Unfortunately, this particular call was not recorded as I encountered technical difficulties,” Ms Monotone explained.
She apologized for “any worry and concern” that HMRC had caused. I said I didn’t want an apology for the worry and worry, I wanted an apology for his failures.
“Can you put it all in writing?” I said, “and confirm that I don’t owe taxes, that you made a mistake, that you caused me unnecessary stress, and that you apologize?” “Yes,” she said, “but unfortunately it will take a week to apologize to you.” “For security reasons, we cannot put personal information in an email. And we only use second class mail. More than two weeks passed before the letter arrived.
In the meantime, I received a statement, via e-mail, from the press office: “We are sorry that we have not dealt with your request to your satisfaction and are able to confirm that your tax payment has been added to your employer file.” I replied, suggesting that they might like to rephrase the statement and apologize for drawing debt collectors on me in the first place and for the subsequent investigation being handled unsatisfactorily rather than it not be processed “to my satisfaction”. They refused to do so.
Hiring a carer: your responsibilities
There’s a lot to think about when it comes to hiring a caregiver for a parent — or for yourself.
For many people, using a home care agency “is a lot less hassle” than employing someone directly, says the government’s MoneyHelper website, but you may not always see the same person, and that will cost more – it says you should allow an extra £5-£10 per hour, depending on need and location.
A regulated agency will handle all payments, taxes and insurance, as well as police checks and reference tracking.
Employing someone yourself gives you more control and will almost certainly cost you less, but gives you quite a bit of responsibility. You are considered an employer if you hire the person and pay them directly, even if you receive money from your local council (direct payments) or the NHS to pay them. If the individual is definitely classified as self-employed, the above may not apply.
Anyone you employ must have a contract of employment and be paid at least minimum wage (£9.50 an hour for people aged 23 and over).
You need to check if the person can work in the UK; have employer liability insurance; register as an employer; and setting up and managing a payroll – or paying someone else to do it – which will involve issuing payslips to the person and will often include the deduction and payment of income tax and employee national insurance contributions.
If they meet the eligibility requirements, they will also be entitled to things such as a professional pension (although for this they would need to earn at least £10,000 a year).
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