Be Careful When Employing Carers Through Personal Service Companies — IR35 May Apply
- Michael Ackers
- 4 days ago
- 4 min read
When arranging care at home, it can be tempting to hire a self-employed carer or to work with someone who provides services through their own limited company. While this may look more flexible or less expensive at first, there are important legal and tax risks to understand — particularly under the IR35 rules.
At Chamomile Care, we believe families deserve clarity and peace of mind when arranging care, so here’s what you need to know.
What Is a Personal Service Company (PSC)?
A personal service company is a limited company set up by an individual who provides their services — in this case, a carer — to clients. Instead of being employed by an agency, the carer invoices you directly through their company.
That might sound straightforward, but it changes who is responsible for things like:
Income tax and National Insurance contributions (NICs)
Holiday pay, sick pay, and pension contributions
Liability insurance and supervision
If HM Revenue & Customs (HMRC) decides that the relationship is effectively one of employment rather than self-employment, the IR35 rules can apply — and that’s where problems begin.
How IR35 Could Affect You as the Client
Under IR35, if a self-employed carer or personal service company is found to be working as if employed, you (the client) could be considered their employer for tax purposes.
That could make you personally responsible for:
Unpaid Income Tax and National Insurance going back several years
Employer’s NI contributions (the carer would normally pay their own NI if genuinely self-employed)
Possible penalties or interest
Employment-law risks (holiday pay, sick pay, dismissal rights)
Most families don’t intend to become employers — but under IR35, even informal arrangements can trigger those obligations.
Signs That IR35 Might Apply
You may fall within IR35 if:
The carer works regular hours for you only and takes instructions from you.
You control what, when and how the work is done.
You provide the tools, equipment or uniforms for the carer.
The carer cannot send a substitute in their place.
Payment is hourly or weekly, rather than for a specific project.
In these circumstances, HMRC is likely to view the relationship as employment — even if the carer issues invoices through a company.
The Safer Alternative — Regulated, Fully Employed Care
When you choose a CQC-registered provider like Chamomile Care, Care Workers are directly employed, supervised, insured and trained.
This means:
All tax, NI, and pension obligations are handled correctly.
You’re protected by employer liability and professional indemnity insurance.
The care service is regulated by the Care Quality Commission.
You have access to a clear complaints and quality-assurance process.
You simply pay for the care service — without taking on any hidden employment or tax risk.
Key Takeaways
Be cautious about employing carers via their own limited companies or “introductory agencies.”
Always check whether IR35 could apply — you could be liable for tax and NICs.
Ask for written confirmation of employment status and insurance cover.
Choosing a CQC-registered home-care provider removes that risk entirely.
Need Trusted, Fully Regulated Support?
At Chamomile Care, all of our carers are employed, trained and supervised to national standards — giving you the reassurance that every aspect of care, compliance and employment is handled properly.
DISCLAIMER
Whilst every effort has been made to verify the accuracy of this blog, Chamomile Care can accept no responsibility or liability for any HMRC decisions regarding whether individual carers fall inside or outside IR35.
The author, Mike Ackers, draws on previous professional experience with IR35 and related compliance matters. For this reason, Chamomile Care chooses not to engage self-employed carers or agency staff, preferring to employ all Care Workers directly to ensure full compliance, training, and supervision.
Anyone seeking to employ a carer independently should obtain qualified legal or tax advice before entering into any arrangement.
Frequently Asked Questions — IR35 and Hiring Carers
1️⃣ Do IR35 rules apply if I hire a carer directly?
Yes — IR35 may apply if you hire a carer through their own limited company (a personal service company) and the working relationship is effectively one of employment. This means you could be liable for income tax and National Insurance contributions if HMRC deems the carer to be an employee.
2️⃣ What is a personal service company (PSC)?
A personal service company is a limited company that an individual — such as a self-employed carer — uses to invoice clients. While it can appear straightforward, it shifts responsibility for tax, NI, and compliance onto the client if the arrangement falls inside IR35.
3️⃣ What are the risks of hiring a self-employed carer through a company?
If IR35 applies, you could be responsible for unpaid tax and NICs, as well as potential employment-law claims. You may also lack insurance protection, supervision, or CQC oversight — all of which are mandatory for regulated care providers.
4️⃣ How can I avoid IR35 problems when arranging home care?
Choose a CQC-registered home care provider such as Chamomile Care. All carers are fully employed, trained, insured, and supervised — meaning you’re protected from any IR35 or employment-related liability.
5️⃣ What if I already have a self-employed carer?
Ask a qualified accountant or legal adviser to review the arrangement. If the carer works fixed hours under your direction, IR35 may apply. It’s safer to transfer your care to a regulated provider where all legal and tax responsibilities are handled correctly.
Need Guidance or Regulated Care Support?
Chamomile Care provides fully compliant, CQC-registered home care across Oxfordshire — so you can focus on care, not contracts.
Call 01235 617737 or contact us online to learn more.
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