Nanny and tax situation?

building

we are looking at taking on a nanny on a part time basis. can they be self employed? what is the law with regard to them being self employed? thanks in advance

Ivenofinmoney

building wrote:

we are looking at taking on a nanny on a part time basis. can they be self employed? what is the law with regard to them being self employed? thanks in advance

Yes, they can be, if they are confident in doing that, and capable of budgetting for tax and NI payments.

Alternatively, you can do the PAYE for them, If you have a PC the inland revenue will provide you with a complete kit to calcualte tax & national insurance, and you should only need to pay the IR once a quarter. It should only take about 5-10 minutes per month to go through. (If you ring them and tell them your considering doing this, they should send you a starter pack and you could have a practice run !!)

Finnally you could find a reputable agency who will handle all the PAYE for you, this might be more expensive, but they will at least provide replacements for holiday's and things.

Hope this helps

building

they only do a certain amount of hours . is this correct?

Ivenofinmoney wrote:

Yes, they can be, if they are confident in doing that, and capable of budgetting for tax and NI payments.

Alternatively, you can do the PAYE for them, If you have a PC the inland revenue will provide you with a complete kit to calcualte tax & national insurance, and you should only need to pay the IR once a quarter. It should only take about 5-10 minutes per month to go through. (If you ring them and tell them your considering doing this, they should send you a starter pack and you could have a practice run !!)

Finnally you could find a reputable agency who will handle all the PAYE for you, this might be more expensive, but they will at least provide replacements for holiday's and things.

Hope this helps

nlpnlp

I would have thought HM Revenue & Customs would be unhappy to accept that a nanny would be self employed - there are a whole raft of tests that are in place to decide if someone is employed or self employed and a nanny would appear to be employed. I think the options are that you would have to employ them for which there are special 'nanny schemes' available from the Revenue as Ivenifmoney has mentioned and you are responsible for paying over tax and national insurance to the Revenue; they would need to provide their services through an agency and the agency would be responsible for Pay As You Earn (PAYE); or they would need to set up their own company and you would need to contract with the company. The nanny would be responsible for running the company, but since April 2003 these arrangements have I believe been caught within the IR35 legislation, so is probably best avoided.

I would recommend that you either employ them direct and use the 'nanny scheme' or go through an agency. You may get away with them being self employed, but that doesn't mean it is correct and ultimately the buck would lie with you.

telly-addict

I agree with nlpnlp, the relationship between the parent and the nanny is one of master and servant. The parent will direct the nanny in what should be done, how and when and as such it is an employment relationship rather than the nanny contracting for services.


I have no idea how their prices compare to a local accountant but the company Nannytax is pretty well known for dealing with PAYE and other employment issues.

http://www.nannytax.co.uk/parents/index.php