Most landlords don’t think about payroll much. They are far more likely to be on someone else’s payroll than need to set up a payroll for their own staff.
Quite a lot of landlords do however pay people to do work for them and often these can be family members. For instance I will regularly hear things like “The bairn cuts the grass every week!” (for the non Geordies a “bairn” is a “child”).
So if you want a deduction for the expense what do we need to do? Well either the bairn needs to be self-employed in their own right OR you need to put them on a payroll. Now for the sake of a fiver a week pocket money to your child during the summer months I wouldn’t bother but if it’s a decent sum you will want tax relief on it. After all saving 40% plus tax to you for possibly no tax cost for your child is worth considering.
HMRC have a tool that you can use to determine if a relationship is one of an employer/employee or self employment. It is called the check for employment status tool and I would recommend you take a look if in any doubt at all. Here is the link!
You might be in a position where you can’t be bothered to go through all the work just to get a tax deduction but regardless of that HMRC would be looking at this from your perspective as a landlord. They will be looking to see if you should have been submitting payroll each time you paid an employee. If you are found to be an employer and haven’t done the payroll you can be fined £100 per missing submission for each month it is outstanding. These fines can stack up very quickly!
So either get the bairn to work for free, make sure they are self employed using the tool or put them on the payroll! They are your only options!
Once you open the door to paying family members to do work for you thought the opportunities are endless. Any family member that is a non-taxpayer should absolutely be doing end of tenancy cleans, inspections, off jobs etc. Most people charge a minimum of £50 call out fee these days so your family can do the same. Just remember to consider the declaration of income from their perspective.
PS This is more likely to be an issue for other things like siblings as a handyman, parent doing the regular cleans on your holiday lets etc… let the bairns be bairns!