WOW...she must be making a lot of money when she has to pay £400.00 in tax for two days work ?
That aside, I DO know how hard it is to get well-paid work when over 60 years of age and it is even harder when one has reached 65 and is in receipt of both a state pension and an occupational pension.... as I am.
I have always said that when a person reaches state pension age they should be released from all income-tax burdens and if they have been prudent enough to be able to get an occupational pension too then that is their business.
Many elderly people simply love working and I say, so long as they are not displacing a young person for any job and they are fit enough to enjoy still going to work each day then they should be encouraged to do this instead of being victimised for this ability.
The only advice that I can give you as an employer is to pay the lady OFF the books as a casual cash-in-hand worker.
As this can be seen as illegal that would have to be your decision !
Another way would be to employ the person as "self-employed" as then the onus is on the employee to make a tax return and pay any tax due.
See this website and get some more information:
http://www.personneltoday.com/articles/2008/06/10/46258/casual-workers-rights.html