How to employ a nanny?

cralol

We are looking to employ a nanny (not an au pair) for x days per week for a defined fixed term period (less than 6 months).
The UK government advice states that nannies must typically be employees (not self-employed), as the definition of an employee includes:

• has to do the work themselves
• can be told at any time what to do, where to carry out the work or when and how to do it
• can be moved from task to task
• are paid by the hour, week or month
• can be paid overtime or receive bonus payments

Hiring the nanny as an employee means that I would be required to:

• register as an employer
• have employee liability insurance
• set up and run payroll, or pay someone else to do it on your behalf (even if you pay the employee in cash)
• pay statutory benefits, for example maternity pay and sick pay
• deduct and pay the employee’s Income Tax and National Insurance contributions

I am posting to ask for advice on whether or not I am understanding this correctly. Is this necessary for a fixed term period of only a few months? Is there a way to hire a nanny on some sort of self-employed fixed term contract?
Thanks in advance.

Sandtree

The easiest alternative is to hire a nanny via an agency so the nanny is the employee of the agency and they have to deal with all those employer matters. Obviously how much an agency will charge will be higher than a nanny directly as they have to cover all the things you mention plus staff to do them and a profit margin.

In theory I guess you could also require the nanny to use an umbrella company which has a similar effect to the above but they skim off their margins and employer costs from the money you pay them so you'd normally inflate the rate to ensure the nanny is getting approximately the same net take home as they'd ordinarily get... you at least have some control over what the nanny gets whereas an agency its a fixed price for someone and you've no idea if they get 10% or 80% of that.

Off payroll employees is a hot topic at the moment if you move in certain circles as old mechanisms to get round the problem are being closed down.

Marcon

cralol said:

We are looking to employ a nanny (not an au pair) for x days per week for a defined fixed term period (less than 6 months).
The UK government advice states that nannies must typically be employees (not self-employed), as the definition of an employee includes:

• has to do the work themselves
• can be told at any time what to do, where to carry out the work or when and how to do it
• can be moved from task to task
• are paid by the hour, week or month
• can be paid overtime or receive bonus payments

Hiring the nanny as an employee means that I would be required to:

• register as an employer
• have employee liability insurance
• set up and run payroll, or pay someone else to do it on your behalf (even if you pay the employee in cash)
• pay statutory benefits, for example maternity pay and sick pay
• deduct and pay the employee’s Income Tax and National Insurance contributions

I am posting to ask for advice on whether or not I am understanding this correctly. Is this necessary for a fixed term period of only a few months? Is there a way to hire a nanny on some sort of self-employed fixed term contract?
Thanks in advance.

It's not the horror amount of work it might sound! Almost all household contents insurance policies include cover for employing domestic staff such as cleaners and nannies (check the small print carefully in your insurance contract). You can register as an employer in a matter of moments: https://www.gov.uk/register-employer. HMRC's free payroll software is a doddle to use: https://www.gov.uk/basic-paye-tools. Tax and NI are quickly paid online. If the nanny is going to earn enough to qualify for auto enrolment, use NEST: https://www.nestpensions.org.uk/schemeweb/nest/employers/get-ready-for-auto-enrolment.html

Make sure you have a simple employment contract in place to ensure both sides are clear on expectations, and the job's done without the need to pay agency fees etc.