It was my worst nightmare. Setting a payroll, sorting out holidays and tax and national insurance for other people. Becoming an employer.
But that’s what it had come to. At 93, my mother, Marje, was no longer capable of looking after herself but she didn’t want to leave Manchester to live with me or my sister in London; nor did she want to live in a home for elderly people.
We heard of two great live-in carers who, between them, could look after her full-time in her own home. But my sister and I couldn’t keep taking out huge wads of cash to pay for them. We’d look like money launderers. As somebody who is financially phobic – and sought help from Martin Lewis about it – the last thing I wanted was to do something dodgy.
So with the help of an accountant I set up a payroll to pay for Mum’s care. Like so many people doing this with no experience of running anything vaguely businessy, I was out of my depth and knew it.
One thing I had worked out is I had to pay the carers’ income tax. I also assumed I had plenty of time to pay it. Enter HM Revenue and Customs.
I’d only set up the payroll last October but in February, March and April I received letters asking for “overdue payments”. I presumed they were a mistake as I’d only been an employer for a few months. Like I say, I was out of my depth. I assumed it would be the same as being self-employed, and I’d start paying the tax the following year.
I checked with my accountant on 20 April, who told me it was for real and I owed HMRC £3,069. I didn’t need to pay it all off at once, but being paranoid, I thought I’d get it out of the way. The money went through on 22 April. Job done.
Only it wasn’t. In mid-May, I received a scary letter from a company called BPO Collections, stating it was time to pay outstanding tax of £1,07.44. BPO Collections explained: “We’re a team of debt recovery specialists … our client HM Revenue and Customs have asked us to contact you about the above balance which is for your outstanding PAYE tax.”
I phoned BPO Collections in a panic. “You’ve got to stop this,” I said. “I’ve paid the money.” “Can’t”, they said. “Only HMRC can do that.” “But check the records, you’ll see I’ve 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 outstanding?” They said they were simply following instructions from HMRC 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 answered. I told her BPO Collections said it could only take me off its hitlist if HMRC told it to. “BPO Collections?” she said. “Never heard of them.” She went away to check. “No, I’m afraid BPO Collections don’t exist. It looks as if you have been scammed.” They look pretty real to me, I said. Nope, she insisted, not real, and anyway HMRC never comes for people after a matter of months. “We don’t do anything for years,” she said.
Eventually she told me she couldn’t help but would put me through to somebody who could. By this time my daughter Maya had found a government website showing BPO Collections as one of HMRC’s authorised debt collection agencies.
Officer two admitted that BPO does indeed collect outstanding tax and that I was not being scammed. He said he would have to put me through to a third officer. Another wait. It looked as if I was getting somewhere with officer three when the line went dead.
By now I was stressed and seriously pissed off. I’d wasted so much time and I was still being chased by the heavies. I couldn’t face going through all this again. So I phoned the press office, and told them I was writing a piece about it and asked a series of questions.
I made the point that I was lucky – I could ring the press office because I’m a journalist. But what if it had been my mother trying to find out why she was being threatened by debt collection agencies, having paid her tax?
The press officer said somebody from HMRC’s complaints team would call back the next day. Sure enough Ms Monotone got in touch. “Unfortunately, an error was made,” she said.
Although the payment had gone from my account on 22 April, Ms Monotone explained that the payment was not processed until 26 April, and earlier that day HMRC had told BPO to take over. Within six months of me becoming an employer – and after I’d paid all the outstanding tax – HMRC had called in its hit squad.
I was confused. My letter from BPO Collections was dated 5 May, which meant HMRC had had two weeks since I paid and nine days since it was registered to call BPO off.
Ms Monotone from complaints explained I was unlucky in the way the dates fell, and unfortunately the system is automated.
She apologised for the misinformation from officer one that BPO didn’t exist and HMRC doesn’t actually send in 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 an opportunity to pay what you owe before removing any of your possessions”?
“Obviously, debt collection agencies are worded in such a way as to get customers to respond. They can be quite distressing when you get that tone of letter,” Ms Monotone acknowledged. “It’s not intended to frighten genuine customers, it’s more to encourage other customers who wouldn’t respond without that bit of a nudge.” But she had just admitted HMRC doesn’t know the difference between tax-dodging corporate giants and people like me because the system is automated.
I had been stamped on by HMRC because I was now a company rather than a person trying to do his best for his elderly mother. There are so many things that could be easily corrected here, I said to Ms Monotone. “If you have a few people at HMRC looking after the many people who have set up ‘companies’ to care for themselves or loved ones that would be a start. If your letters weren’t automated. If you got on the blower to the heavies as soon as you receive our payment to call them off. If you cared about us sufficiently not to scare us witless by setting debt collectors on us when we don’t owe money in the first place.”
She said for the third time: “Unfortunately for genuine customers it can be quite frightening and I do understand that.” She promised to pass my ideas on, but the problem was that HMRC had no resources.
“You know you record calls, please pass the recording of this conversation on, so the big cheeses at HMRC can think about ensuring this doesn’t happen again.”
“Unfortunately this particular call hasn’t been recorded because I’ve had some technical difficulties,” Ms Monotone explained.
She apologised for “any worry and concern” HMRC had caused. I said I didn’t want an apology for worry and concern, I wanted an apology for its failings.
“Can you put all this in writing?” I said, “and confirm I don’t owe tax, you made a mistake, caused me unnecessary stress and that you apologise?” “Yes,” she said, “but unfortunately it will take a week to get the apology to you.” “For security reasons we can’t put personal information into an email. And we only use second-class post.” More than two weeks passed before the letter arrived.
In the meantime, I received a statement, by email, from the press office: “We are sorry that we did not handle your inquiry to your satisfaction and are able to confirm that your payment of tax has been added to your employer record.” I replied, suggesting they might like to reword the statement and apologise for getting the debt collectors on to me in the first place and for the subsequent inquiry being handled unsatisfactorily rather than it not being handled “to my satisfaction”. They declined to do so.
Hiring a carer: your responsibilities
There’s a lot to think about when it comes to hiring a carer for a relative – 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 it will cost more – it says you should allow an extra £5 to £10 an hour, depending on needs and location.
A regulated agency will handle all payments, taxes and insurance, as well as doing police checks and following up references.
Employing someone yourself gives you more control and will almost certainly cost less, but gives you quite a few responsibilities. You are classed as an employer if you hire the person and pay them directly, even if you get money from your local council (direct payments) or the NHS to pay for them. If the individual is definitely classed as self-employed, the above may not apply.
You must check if the person can work in the UK; have employers’ liability insurance; register as an employer; and set up and run a payroll – or pay someone else to do it – which will involve giving the person payslips and will often include deducting and paying the employee’s income tax and national insurance contributions.
If they meet the eligibility requirements, they are also going to be entitled to things such as a workplace pension (although for that, they would need to earn at least £10,000 a year).