Tax question for an employer?

jonosh69

Evening all

Looking for some advice.

I have just started paying a childminder £50/day for 3 days work a week. She only works term time so a total of 38 weeks a year. So a total of £5700/year.

I pay her by BACS transfer weekly, so my question is dhould I be registering as an employer and doing tax and NI even though she is earning well under 10,000. This is her only job.

Hope that makes sense

xylophone

http://www.surreycc.gov.uk/learning/early-years-and-childcare-service/registered-childminders-and-your-childminding-business/managing-and-developing-your-childminding-business/tax-and-national-insurance-for-registered-childminders

might be worth a look.

TheCyclingProgrammer

What blondebubbles said. As soon as you have one employee earning over the NIC LEL you need to register as an employee and pay all of your employees via PAYE.

You should have checked this before you started paying her really.

Savvy_Sue

Except that childminders are usually self-employed, caring for more than one family's children in their own home, they are registered with Ofsted, they carry their own insurance, they sort out their own tax - and they'd usually have a contract they'd expect the parents to sign which will set out what they charge for their holidays, the hours they'll work, what they'll provide and what you'll provide, and so on.

If the OP is indeed employing a childminder then there's a whole lot more than the tax situation to consider: entitlement to paid holidays for example.

jonosh69

Thanks for the replies.

I should have been a more careful in my choice of language. She isn't a registered childminder, she is currently studying and looks after our kids to earn some cash to pay for college. So basically like a babysitter who does long hours!

You'd normally pay a babysitter cash in hand right? Why I s this different? Apologies if this an obvious and dumb question, but registering as an employer and doing all the extra stuff sounds OTT when I could just pay cash and let her worry about tax?

jonosh69

Perfect, thanks

TheCyclingProgrammer

It sounds to me like there isn't an employee/employer relationship as I am assuming you don't get to dictate to her when she babysits for you and that she is entitled to refuse work.

On that basis alone there probabky isn't sufficient mutuality of obligation for a contract of service to exist.

So in other words, it's down to the babysitter to manage her own tax duties. She doesn't necessarily need to be registered as self employed just for doing the occasional bit of babysitting (but her income should be declared) although if she regularly babysits for multiple clients and is indeed running a proper childminding business she should be.

None of this is really your concern though as long as you are happy she is sufficiently qualified to care for your children.

Savvy_Sue

TheCyclingProgrammer wrote: »

It sounds to me like there isn't an employee/employer relationship as I am assuming you don't get to dictate to her when she babysits for you and that she is entitled to refuse work.

She may be able to refuse work, but I think the OP does dictate when she babysits - 3 days a week! And if she does refuse work too often, I suspect the OP will be looking for a replacement. And although you didn't mention it, I suspect the OP won't accept a substitute, at least not without prior agreement.

jonosh69 wrote: »

I have just started paying a childminder £50/day for 3 days work a week. She only works term time so a total of 38 weeks a year. So a total of £5700/year.

I pay her by BACS transfer weekly, so my question is dhould I be registering as an employer and doing tax and NI even though she is earning well under 10,000. This is her only job.

If this is her only job, she won't be liable to pay tax (unless she has other taxable income).

TheCyclingProgrammer wrote: »

So in other words, it's down to the babysitter to manage her own tax duties. She doesn't necessarily need to be registered as self employed just for doing the occasional bit of babysitting (but her income should be declared) although if she regularly babysits for multiple clients and is indeed running a proper childminding business she should be.

On those figures she won't owe any tax, all other things being equal, but would need to keep the proof.