Options for paying Nanny - cash, salary etc?

feelinggood_2

I'm not sure which is the best board for this, so if you think I'd get more answers elsewhere, please let me know!

Basically, I need to decide how to pay my Nanny. She'll be working 4 hours a week, at £10 an hour. She is happy with whatever method I chose.

This is her only job so would she/I need to pay tax and NI? Is that her responsibility?

I'm not claiming childcare vouchers or anything, so I have no need for it to be 'official'. It is a very relax and flexible arrangement.

Any thoughts?

bryanb

Nanny or Au pair? The rules differ.

feelinggood_2

bryanb wrote: »

Nanny or Au pair? The rules differ.

I'm not entirely sure. It is a bit 'in between' - not quite Nanny, not quite Mothers' help.

She will be live out, just for those four hours. Willing and qualified to have sole charge, but I'll likely be around for most of the time.

PRINCESSX87

I work in this field (Although not currently) so here goes:

A nanny and childminder are known as self employed, Which means if this is her only source of income then she will not pay any NI or tax as she would only be making £120.00 PCM.

When i was working for a family i was making just short of £150.00 pcm and called the Tax office. They told me and many other minders / nannies i know the same thing, If you making less the £175 monthly then they cannot charge you as its under what the gov says you need to live on.

But.... You need to call the tax office and explain your payment to them as they will then send you out a form which both parties need to fill out.

Hope this helps

Fly_Baby

PRINCESSX87 wrote: »

A nanny and childminder are known as self employed, Which means if this is her only source of income then she will not pay any NI or tax as she would only be making £120.00 PCM.

I was always under impression that nannies are different from other childcare providers because they are employed by the child's parent. So the parent pays their taxes, holidays, days of sick and bears other standard responsibilities of an employer.

So nannies work out much more expensive as a result.

But maybe it only applies to full-time nannies?

fengirl_2

Other answer is incorrect. Nannies are employees of the person for whom they work as they are in the employer's premises and directly under their control. Childminders who work from their own homes are self employed.
As the employer of a nanny, you are required to operate PAYE on her pay, but most nannies expect you to use the net pay system (too long to explain her, but HMRC will explain) which measn they get their guaranteed pay every week - you add the tax and NIC on rather than deduct it.
However, as you are only paying her £40pw, this is way below the tax and NI threshold, so you dont pay anything for tax and NIC. Just download a form P46 from www.hmrc.gov.uk and get her to sign to say this is her only job and you will be covered should she be lying and HMRC investigate.

bryanb

fengirl wrote: »

Other answer is incorrect. Nannies are employees of the person for whom they work as they are in the employer's premises and directly under their control. Childminders who work from their own homes are self employed.
As the employer of a nanny, you are required to operate PAYE on her pay, but most nannies expect you to use the net pay system (too long to explain her, but HMRC will explain) which measn they get their guaranteed pay every week - you add the tax and NIC on rather than deduct it.
However, as you are only paying her £40pw, this is way below the tax and NI threshold, so you dont pay anything for tax and NIC. Just download a form P46 from www.hmrc.gov.uk and get her to sign to say this is her only job and you will be covered should she be lying and HMRC investigate.

The above advice is spot on.
Au pair is a bit different as they can be paid pocket money, they are expected to be attending college etc and only "work" a few hours and babysit etc.

rupee99

Nannies are almost always employed, the one in your circumstances definitely is.

You will have to operate a PAYE scheme for her but at £40 per week there will not be any liability for either you or her. HMRC do have a simplified scheme, although in the way of these things people often say its more complicated, but that is probably because they may be used to the full scheme.

Fat_Cat

Hello,

Have been looking for information as we are possibly going to be in a similar situation. A child carer is offering to look after our daughter and we would pay her approximately £165 a week. Our daughter would be the only child she would look after for now, but she would be looking to look after another child too to keep her income up.

On this basis, would we be her employers or would she be self employed and if the former would we then be liable for her tax and NI?

Thanks for any help!

Annisele

Fat Cat, where will the carer be looking after your daughter? If it's in your home, then she's probably your employee and you'd have to sort out her tax and NI. If it's in her home, then she's probably self-employed (especially if she's intending to care for somebody else's child in her home at the same time).

Fat_Cat

Hello,

Thanks for your help. I think the plan will be to look after her sometimes at our place and sometimes at hers. There will be no set plan and it sort of depends on what she plans on doing that day.

Didn't realise that it would be so complicated hiring childcare!