The Caring Government? Targeting care homes

Project to target care homes

Most people can understand that H M Revenue & Customs (HMRC) will target tax avoidance schemes used by the rich and famous but did you know that there is also a project to target care homes?

At a PAYE inspection the HMRC officer confirmed that there is a project targeting care homes. There are a couple of areas that HMRC are looking at in detail, National Minimum Wage (NMW) issues and the status of workers.

The  NMW

The NMW is not as straight forward as many believe. To determine the pay, you need to consider annual/ monthly hours, time off in lieu and meal breaks. The employee’s contract is vitally important, as this determines the basis of the employee’s hours, breaks and pay and will be requested by HMRC. Where employers get it wrong and the liability is over £100.00, then it is likely that the care home will be named and shamed by HMRC (on their website), even for a small amount of £100.00. This is something all businesses want to avoid.

Status of Workers

The second concern is whether some of the carers are really employees even if they have been treated as self-employed. Again, this is a complex area. The status of workers has been targeted by HMRC for a number of years and has included a number of court cases to confirm their opinion of the legislation. For a small business, a large legal bill is something to be avoided.

So, how do you protect your business from HMRC?

Vantage Fee Protect has a number of specialist consultants who are able to review the current contracts and highlight any potential areas of HMRC action. If there is a concern, they are able to advise on the best way forward and can even make suggestions on how the contracts can be re-drafted to assist you.  If you would like to speak to a consultant to discuss these issues, then please call the advice line on 0116 243 7892.

Remember, prevention is better than the cure.

If you haven’t a Tax Fee Protection scheme with Vantage Fee Protect and would like one, please contact us.