I employ directly as well and pay £15ph. I could pay less but I wanted to motivate/reward the carer and so felt she should have the agency share.
It has been a lot of work though. Checking paperwork (the sheltered housing also need to see it for their insurance as she is on their premises) insurance, PAYE and NI, NEST pension, contract and Job Description, grieveance procedures etc. Don't start on European Working Time Directive. I have felt as if I have become a mini personnel department.
Worth it as the carer has been with her three years and has contributed to her, and my, welfare.
HMRC are clamping down on smaller employers. It think the threshold is around 13 hours a week working for a single person. There is probably a case to say someone is self-employed it they laregly set their own hours and tasks. My accountant warned against it, but the lawyer said accountants always do, Lawyers argue against employment, as there is lots of scope for things to go wrong. In the end the carer wanted it on the level (even though I offered to pay for my accountant to do the self employment stuff). And I like the idea that should my mother die or move to a home, I can pay the carer proper redundancy without getting into the minefield that is a POA's ability to make gifts and the IHT implications.
That said I am helped by the fact my mother could afford to cope with an employment claim, and can afford to pay redundancy. Plus though I don't like admin, I prefer it to personal care (if my mother would allow it) or to trying to manage agency carers long distance.
If anyone is headed down a similar road, I am happy to contribute my new found knowledge and experience.
And ask everyone. A plumber I was using commented that his mum was a carer who was looking for work because the person she had looked after for years had just died. My mums was an agency carer who seemed to have built up a good rapport with my mum.