Tax/NI question(s)!

BillyB

Hi

Just a few questions, as a lot of googling later, Im still none the wiser!

If somone employs me as a nanny for minimum wage (£6.19) for 25 hours or less a week, would it cost them anything (Tax or NI contributions) other than paying me?
- Im registering with OFSTED so that they can claim Child Care Vouchers.

It might only be for a few weeks to begin with. Once they register as an employer, do they remain registered, even if Im not doing any work for them for a few weeks.. or would they have to start the process again..?

I hope this makes sense!
Thanks..!

notanewuser

BillyB wrote: »

Hi

Just a few questions, as a lot of googling later, Im still none the wiser!

If somone employs me as a nanny for minimum wage (£6.19) for 25 hours or less a week, would it cost them anything (Tax or NI contributions) other than paying me?
- Im registering with OFSTED so that they can claim Child Care Vouchers.

It might only be for a few weeks to begin with. Once they register as an employer, do they remain registered, even if Im not doing any work for them for a few weeks.. or would they have to start the process again..?

I hope this makes sense!
Thanks..!

Not ordinarily. But they'll be responsible for paying you for holidays and ensuring the requirements of the working time directive etc are followed.

BillyB

So other than if my earnings go way above that, there will be no extra costs? I understand that they cant make me work over a certain amount of hours and are responsible for holidays etc.. This is quite a new thing, looking to happen in the next few weeks, So wanted to see if it would cost them anything extra..

madgagoo

I'm not convinced you can be employed by them and paid via childcare vouchers. The vouchers are to pay an OFSTED registered business not an employee.

Therefore I would say they will be paying you as a self employed individual and it will be your responsibility to submit a Tax Return and pay class 2/4 NI contributions, as appropriate.

Edit - a further thought has occurred that they have set up a childcare business, which you will be employed by in which case this business would need to be OFSTED registered. Which I would say is a bit of a suspect way to do things, HMRC might take a dim view of this arrangement. However, if this is the case then that isn't your concern and the poster above is correct.

Davide123

BillyB wrote: »

So other than if my earnings go way above that, there will be no extra costs? I understand that they cant make me work over a certain amount of hours and are responsible for holidays etc.. This is quite a new thing, looking to happen in the next few weeks, So wanted to see if it would cost them anything extra..

Well they will have to pay someone to do the payroll? Or did it themselves.

BillyB

Im a little confused as to what you mean.. I am qualified and once I meet the rest of the criteria I can apply to be registered on the voluntary OFSTED register and then can accept child care vouchers, as long as I register myself with the voucher company or wherever they come from?

madgagoo

BillyB wrote: »

Im a little confused as to what you mean.. I am qualified and once I meet the rest of the criteria I can apply to be registered on the voluntary OFSTED register and then can accept child care vouchers, as long as I register myself with the voucher company or wherever they come from?

I may be wrong as this is quite a long way from my area of speciality but if you are paid via childcare vouchers then you are a business (in your case a sole trader, self employed nanny). As you receive the vouchers/payment direct from the childcare voucher provider with no tax deducted you are not employed.

As you are self employed you are therefore responsible for your own tax & NI and no holidays etc.

You could (continue?) to be employed as a nanny but I don't think your employer can pay you using childcare vouchers. Unless they used the (potentially dodgy) way I outlined in my previous post.

BillyB

Im not emplyed yet, Its just at discussion stage. I didnt see it as a problem as I can be a nanny without the Osted registration but my main reason for being registered is to be able to accept vouchers etc.

I did look at being self employed and read somewhere I dont fit the criteria as this is/will be my only job and the hours are set by them, what Im required to do is set by them.
Just found this:
''There is some additional hassle (and cost) because you have to employ a nanny (they cannot be self-employed unless they look after children from more than one family, where rules are slightly different) which means you have to pay their tax.''

madgagoo

As I say, this is quite a long way from my area of specialism, so please take advice elsewhere as well. I'm just offering my opinion that being employed and accepting childcare vouchers is not compatible.

BillyB

I have been doing a lot of looking online and looks as though, if I am only working for one family, I have to be employed. However, If i was working for more than one family or irregular hours/ad hoc I could be self employed. Still confused about the vouchers though as I cant find a definitive answer!

cr1mson

I would say the simplest way would be to get them to use a company like Nannytax they actually have a good Q&A on vouchers

http://www.nannytax.co.uk/q-a-childcare-vouchers

http://www.nannytax.co.uk/can-nannies-be-self-employed