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It is illegal to pay a friend to look after DD if she's not registered? Really???

(74 Posts)
spekulatius Mon 11-Feb-13 23:24:39

I was looking on council's website under childcare for more info re childcare in general and it said the following:

"By law, you must be registered with Ofsted (The Office For Standards in Education), if you are being paid or rewarded to look after other people's child(ren) in your own home."

Does that mean I can't ask a friend to look after DD (will be 9 months by then) when I go back to work (would only be for 2 mornings anyway) and pay her? Really???

I would rather leave her with a friend who loves her anyway than with a complete stranger! And she would be the only child under 12 so would get more attention.

TheMightyLois Mon 11-Feb-13 23:26:43

Yep. Depends how many hours its for though. I can't remember the numbers but I'm sure someone will be along in a bit to clarify

How many hours are you going to be working?

Flisspaps Mon 11-Feb-13 23:33:04

Yes, if it is in your home, for more tha 2 hours.

Ofsted do a fact sheet: here which details how you can thank your friend but stay within the law. I registered as a CM to look after my friend's daughter.

spekulatius Mon 11-Feb-13 23:35:36

I work 37.5 hours but my husband would have her as well so only need somebody for 2 half days 7-2 and maybe a babysitter one evening 6.30-9.30. Not sure if we should ask someone else for the evening or stick to same persons as not to confuse baby? Not sure.

Flisspaps Mon 11-Feb-13 23:38:47

You'd probably struggle to get someone who'd be willing to do the 7-2 and then an evening shift too.

You'd be better with a babysitter anyway in the evening surely, so DD is home in her own bed? CMs work from their own homes, not in the child's home.

Flisspaps Mon 11-Feb-13 23:40:56

Sorry - that first line of my first post should read if it is in her home for more than two hours.

In your home would make her a nanny, and that'd make you liable for sorting and paying her tax!

nannynick Mon 11-Feb-13 23:42:52

Ofsted: Registration Not Required factsheet is also worth a read.

The Childcare (Exemptions from Registration) Order 2010 - the legislation with regard to having a friend provide care.

The problem in your case I think is Payment and the place that care is provided. If your friend came to home home, then they would be a nanny and you could pay them as an employee.

OutragedFromLeeds Mon 11-Feb-13 23:44:54

You can pay an unregistered friend to look after your DD, but it needs to be in your home. She is able to look after your DD in her own home for up to 2 hours a day I think without registering.

So, if your friend's children are all 12+ and at school, you could drop DD at her house for 7am, she can be there to see her kids off to school at 8:30am and then head over to your house until 2pm. You would be employing her as a nanny and would need to sort tax/NI.

wannaBe Mon 11-Feb-13 23:46:50

I'd do it anyway. who's going to know?

spekulatius Mon 11-Feb-13 23:50:07

My plan was for friend to have her at her house 7-2 twice a week and then someone come to our house one evening, like Flisspaps said so that she can be settled in bed (though hopefully still be awake when I came so I an get a cuddle. I'm sure it wouldnt be too difficult to find a babysitter. Don't want to do something illegal but also don't want to complicate things. My friend is a SAHM and loves babys so she is more than happy to look after her, not as a business. I'll have a look at those documents,thanks.

spekulatius Mon 11-Feb-13 23:51:05

WannaBe, that is what I thought as well as it won't be enough hours to pay tax anyway.

spekulatius Tue 12-Feb-13 00:04:42

Basically none of the exemptions apply as it's more than 2 hours a day (doesn't matter who's house it is apparently) so we can't pay her or buy groceries but could pay for their petrol or cloths or holidays? I think that's what it means "money or money's worth".

It's just that my husband and I think looking after a baby is hard work, surely we should show appreciation even though my friend would probably do it for free.

OutragedFromLeeds Tue 12-Feb-13 00:13:20

It does matter whose house it is. Nannies do not need to be registered, if you employ her as a nanny she does not need to be registered (though if she is you can use childcare vouchers to pay her).

spekulatius Tue 12-Feb-13 00:24:09

I see what u mean. Childminder v Nanny. I wouldn't have to pay NI/tax for her though, would I? It's only 14 hours a week. Does everybody get childcare vouchers? All very new to me, sorry.

OutragedFromLeeds Tue 12-Feb-13 00:55:09

If she was a nanny then you would be responsible for her tax/NI and employers NI, but you would only have to pay that if she was earning over the tax-free allowance. If she's under that then I'm not sure what you do tbh, I think maybe you have to register somewhere, but don't actually pay any tax/NI unless she goes over the threshold. You need MrA.

Childcare vouchers will be from your workplace, it's a salary sacrifice scheme. I think most, but not all, employers offer them, both you and DH would be able to get them (if your employer offers them). Have a look here. Your friend would need to be registered with Ofsted as a nanny though.

nannynick Tue 12-Feb-13 08:21:07

How much would you be considering paying them and do you know if they have any other income -I would guess not as a SAHM but you never know, not of pension age are they?

nannynick Tue 12-Feb-13 08:23:35

Childcare vouchers can only be used for registered/approved care, so your friend would need to register as a childminder, or nanny. It will complicate things in my view as your friend would need to do training and have insurance.

spekulatius Tue 12-Feb-13 08:51:20

Thought I would pay her some what cm charge here. They usually charge £3.50-4.00. She's about 40, def not pension age. Yes I don't think it would be worth for her to register as she's not doing it as an income and would only have my DD. Thought it would be a straight forward thing!

MrAnchovy Tue 12-Feb-13 09:03:17

If you want to use childcare vouchers she will have to be registered (as either a childminder or a nanny).

"Money or money's worth" only includes money and things that can be used as money so you CAN pay an unregistered friend in groceries, but you cannot give her Waitrose vouchers or let her do an online Tesco order and pay for it yourself.

If she works in your home she will be your employee. You will have to operate PAYE if she already has another job or if you pay her £107 or more in any week; you must have Employers Liability Insurance which may be included with your household insurance but if it isn't it can be difficult and/or expensive to arrange separately.

MrAnchovy Tue 12-Feb-13 09:05:12

Oh if she is your employee you must pay at least National Minimum Wage (£6.19ph), give 5.6 weeks paid holiday etc.

nannynick Tue 12-Feb-13 09:19:41

Is she really wanting to commit to doing the times you need every week? What if she has somewhere to go, she may need to let you down with a couple of days notice or less.

Why pay at all. How about just being friends, she helps you out, you help her out. Does she have a garden, are you good with plants? Does she like fancy restaurants, could you take her out for evening meal on occasion?

spekulatius Tue 12-Feb-13 10:37:32

Well it seems to be getting complicated. Def don't want to do the nanny option. I'll have to talk to her, maybe she can think of something else. Or if not find a really nice registered cm.

Xenia Tue 12-Feb-13 10:46:29

It is not true that everyone working in your home is an employee. I have a BT man coming today who is not. I have a genuinely self employed cleaner who is not. I have men coming in to cut trees sometimes.

Look on the HMRC website about what makes someone an employee. If you get her to come to your house for these short and occasional hours she may be self employed and if she is paid under the single person allowance - very very likely then even if she is an employee then there will be no tax and under NI levels no NI.

The simple answer to your question is if she comes to your house like any other babysitter which countless mumsnetters will have regularly are not employees and are allowed to babysit in your own house even if it is every Friday 7 - 9pm week in week out.

MrAnchovy Tue 12-Feb-13 11:59:10

"It is not true that everyone working in your home is an employee."

Nobody said that. But someone who you pay to look after your children in your home for 14 hours each week and has no other work is.

blueberryupsidedown Tue 12-Feb-13 13:47:24

Am I wrong in thinking that only registered childminders can have Liability Insurance? and also they have special insurance on the car?

What about first aid? If you decide to go ahead with your friend, at least I would pay for her to have paediatric first aid course. THis is really, really important.

OutragedFromLeeds Tue 12-Feb-13 13:57:04

Nannies are (or should be) insured. The nannies I know that drive for work have extra insurance as well.

First Aid is interesting. Do you think the OP and her DH have first aid training? I wonder what percentage of new parents do a paediatric fist aid course. I wonder how many people make their parents do a first aid course before they let them look after grandchildren.

Flisspaps Tue 12-Feb-13 14:27:04

Outraged I think all parents of young children, and anyone else who looks after them, should have some sort of first aid training.

Tanith Tue 12-Feb-13 14:38:11

The parents first aid argument is a bit of a red herring.
It's about statistics, isn't it? The more children you have/look after, the more likely you will need to administer first aid in an emergency or have to deal with a life-threatening condition or allergy.

I've had to deal with two life-threatening emergencies and I've looked after over 80 children to date.
Quite frankly, of all the training I have had to undertake, I consider that one to be the most vital.

forevergreek Tue 12-Feb-13 14:52:52

She would be a nanny. And would be employed by you needing tax etc paid.

You would be here employer as you are saying you need her twice a week 7-2pm. Someone who is self employed can say my hours are 9-3 everyday if you want to use my service.

Like a cleaner is self employed as usually have many clients and tell them what hours/ days they are free.

Tax will probably need to be paid as I think it's anything over £107 a week. £3.50 might be your local childminders rates but that's diene to them having several children at that rate ( so 3 under 5s would be £10.50 an hour, plus extra if they have children before and after school). A local nanny rate is prob more like £8 net an hour ( based on area from childminder fees).
£8net is around £9.50 gross. 9.50 x 14= £133 per week, plus an extra 9.50 per hour for any evening work.

( approx figures based on London avergae being £10 net/£13 gross per hour)

OutragedFromLeeds Tue 12-Feb-13 14:55:06

Fliss They should be*. My question was, are they?

Alibabaandthe40nappies Tue 12-Feb-13 14:57:08

Xenia - my cleaner isn't my employee, because she is self-employed and runs her own business. Totally different situation to having someone come to your home to look after your child and paying them, as themselves, not through a business. Not like you to miss the detail hmm

Xenia Tue 12-Feb-13 15:05:22

People are making a massive mountain out of a molehill over this. If she is an employed she is probably paid less than the level on which tax is payable. If she is self employed she pays tax on what she is paid again IF and only if her annual income is above the tax level which it may well not be.

2 mornings a week is a bit like leaving your children in your home with a babysitter 2 evenings a week. Highly likely she is self employed and up to her to pay tax on that income if she is over the limits.

The simple answer to the question if is she looks after the child are your house then it is absolutely fine.

CheerfulYank Tue 12-Feb-13 15:06:22

It does seem a bit silly, doesn't it?

Here in the US you don't have to be registered if you're looking after only one family. Which is also a bit silly, because you could legally look after six children from the same family but not two unrelated kids.

OutragedFromLeeds Tue 12-Feb-13 16:10:20

'The simple answer to the question if is she looks after the child are your house then it is absolutely fine.'

It's illegal.

You might not agree with the law, but it's still the law.

There's a good chance no-one will know, but it's not 'absolutely fine'.

And it's not 2 mornings a week, it's the best part of 2 days a week, 7 hours a day. It's also not like ad-hoc occasional babysitting, it's a regular agreement.

Flisspaps Tue 12-Feb-13 16:17:07

Aside from it being illegal, it's really bloody annoying for those of us who bust a gut to make a living from childminding legally, who jump through all the hoops with regard to Ofsted, the ICO, insurance, first aid training, Environmental Health registration, tax (and lose tax credits through declaring earnings that take your household over the threshold)

MrAnchovy Tue 12-Feb-13 17:36:38

Xenia you're the one making a mountain out of a molehill, everyone else is just answering the OP's questions correctly.

Instead of leading us down the garden path with unsupported statements like "highly likely she is self employed", why don't you look on the HMRC website about what makes someone an employee?

Xenia Tue 12-Feb-13 17:40:22

!'The simple answer to the question if is she looks after the child are your house then it is absolutely fine.'

It's illegal."

Why is it illegal? I thought everyone agreed that you can pay someone in your own home to look after your child. It is not illegal to do that. Every mumsnetter going out on a Friday night paying a babysitter is not committing an illegal act. Where is the illegality? There is illegality if it is at the home of the friend but not at the child's home.

2 mornings a week. Highloy light the person is self employed nad highly likely unless you are paying her nanny type rates she is paid about 60 a week so well well well under any tax limits even if she were employed.
One reason this country is in such a mess is everyone assumes more regulation exists than it does.

forevergreek Tue 12-Feb-13 17:55:48

Xenia- why would she not be paying her nanny rates? 14hrs min a week in op house, on days she wants, at times she needs makes her an employeres nanny. And yes as a nanny I pay tax on babysitting

Thearetically a nanny could work 7 nights a week babysitting 6pm-midnight. At £10 that would be £420 cash in hand If they paid no tax. Or earning £21000 a year

OutragedFromLeeds Tue 12-Feb-13 18:19:48

'Why is it illegal? I thought everyone agreed that you can pay someone in your own home to look after your child. It is not illegal to do that. Every mumsnetter going out on a Friday night paying a babysitter is not committing an illegal act. Where is the illegality? There is illegality if it is at the home of the friend but not at the child's home'.

You're right Xenia, sorry misread what you said!

Xenia Wed 13-Feb-13 11:08:58

I thought it was two mornings a week and yes of course the self employed pay tax on their earnings. The question was can she pay her friend and the answer is yes if the friend looks after the child at home. of course if the friend earns over the single person allowance which is probably very unlikely then the friend must pay tax on the pay and yes sometimes your babysitter is your employee, sometimes your caterer or gardener or cleaner may not be not always by any means and here the hours are so few that it is unlikely whether self employed or employed any tax is likely. I agree with forever that if the hours are fixed then even part time it is possible the person is an employee but certainly we don't know enough here to know if that is so and secondly likely the amount paid is less than tax thresholds anyway.

lpy101 Wed 13-Feb-13 11:58:05

Just another thought....

I would avoid this at all costs. A friend of mine asked me to be her childminder as I had just resigned from teaching. I went through the whole, long winded, expensive process of registering. Her and her husband took the utter piss, sending their child ill constantly with runny tummies, fevers, you name it!! They refused to collect when they were both off work and turned up whenever they felt like it. They paid me less than the going rate which I stupidly agreed to as they were 'friends'. I felt more and more annoyed and the relationship became strained. Finally, they gave me notice ( not even the full four weeks) to put their awful spoilt child into a nursery, leaving us financially screwed!!
I have had a bad experience and it has put me off childminding for life!! I am happily returning to teaching without another shitty bum in sight!!!
I'm not saying you would take advantage by any means but if you value your friendship, look for a proper childminder!

I think the hours make the difference - between 8am and 6pm there are different rules, so babysitters don't have to be registered.

Mrscupcake23 Wed 13-Feb-13 13:17:13

I wonder how many people pay their cleaner and gardener cash?? I would just pay cash and keep quiet nobody would ever know. Nannies do not need to be registered nor do babysitters.

Xenia Wed 13-Feb-13 13:23:49

If the child is at its parents' house the rules are the same whether you are an evening babysitter or not. The tests are the same. If the person doing the looking after is self employed they pay their tax - if they are paid enough for tax to be due (a very big iff these days with the single person allowance heading towards £10k a year). If they are employed again and IF the earnings exceed the allowance etc then the employer will have employer NI etc and to run PAYE.

Everyone in the UK has the right to pay anyone cash of course but that is irrelevant to whether tax is due.

Are we really suggesting that someone working 2 mornings a week is likely to be paid enough for that sum to be over the tax thresholds anyway?

Mrscupcake23 Wed 13-Feb-13 13:28:58

I agree Xenia I meant cash in hand. I think it is between them two.

OutragedFromLeeds Wed 13-Feb-13 14:02:30

Yes, you're right Mrscupcake, why bother paying tax?! What's a bit of tax evasion between friends? hmm

OutragedFromLeeds Wed 13-Feb-13 14:05:47

'Are we really suggesting that someone working 2 mornings a week is likely to be paid enough for that sum to be over the tax thresholds anyway? '

It's 14 hours a week. A nanny in London would probably earn over the threshold in 14 hours, given pay is around £12-13ph. The OP is proposing paying something like £4ph though, so wouldn't be over the threshold.

MrAnchovy Wed 13-Feb-13 14:21:41

"I think the hours make the difference - between 8am and 6pm there are different rules"

This is not true.

MrAnchovy Wed 13-Feb-13 14:35:33

"If the child is at its parents' house the rules are the same whether you are an evening babysitter or not. The tests are the same. If the person doing the looking after is self employed they pay their tax - if they are paid enough for tax to be due (a very big iff these days with the single person allowance heading towards £10k a year)."

Although the Personal Allowance is indeed heading towards £10k a year, self employed people start paying tax (Class 2 National Insurance) if their earnings are above £5,595 a year, although it is only £2.65pw, and pay Class 4 National Insurance at 9% on earnings above £7,605pa.

"If they are employed again and IF the earnings exceed the allowance etc then the employer will have employer NI etc and to run PAYE."

Again the threshold at which an employer must operate PAYE is much lower than the Personal Allowance at £107pw, but if the employee already has another job then the employer must operate PAYE regardless of earnings.

"Are we really suggesting that someone working 2 mornings a week is likely to be paid enough for that sum to be over the tax thresholds anyway?"

The point is not whether the earnings will be over the tax thresholds, it is that the person is an employee and therefore subject to regulations regarding the National Minimum Wage, minimum annual leave, Employers Liability Insurance etc.

MrAnchovy Wed 13-Feb-13 14:42:50

"I wonder how many people pay their cleaner and gardener cash??"

The work of a cleaner or gardner is almost always self employment and so the responsibility for paying any tax due falls on them.

A childcarer working in the home of the child is almost always employed (and the situation described has none of the characteristics that give rise to an exception to this) and therefore the responsibility for paying any tax due falls on the employer.

Xenia Wed 13-Feb-13 14:44:52

Yes, but it is likely on the facts given the wages are well under all the tax and NI levels so all this panic on the thread is not helpful to the pesron concerned. The basic point is that if you pay someone two mornings a week or 2 evenings a week to mind your children as long as in your house is not subject to registration, is legal and probably does not have tax implications particularly if she earns nothing else from anyone. So the poster can probably sleep easy and go away without worries unless she wants the child looked after in her friend's place.

MrAnchovy Wed 13-Feb-13 14:58:48

Just to clear it up, the main reasons a babysitter is not employed are:

1. Babysitting is generally booked on an ad hoc basis; the parents have no right to expect that the babysitter will be available for work and the babysitter has no right to expect the parents to ask them to babysit.

2. Once the children are in bed a babysitter can generally do as he wishes - read a book, watch a film, do homework or marking etc.

Note that neither of these are necessary conditions, but either is sufficient on its own.

Mrscupcake23 Wed 13-Feb-13 15:07:14

Mr anchovy surely you are not allowed to take the cleaners word for it that she is self employed? Also what difference does it make if the sitter can do what they want when children are in bed. What about people on call ? They still get taxed.

Mrscupcake23 Wed 13-Feb-13 15:08:27

So if you don't employ a cleaner every week you don't have to pay tax?

OutragedFromLeeds Wed 13-Feb-13 16:07:57

Xenia it is 7 hours a day, that is the equivalent of 9am-4pm, it is not two mornings (i.e. a couple of hours) a week.

There is a difference between giving someone accurate information and panicking. No-one is panicking.

OutragedFromLeeds Wed 13-Feb-13 16:12:00

'Mr anchovy surely you are not allowed to take the cleaners word for it that she is self employed'

Guidelines from HMRC decide who is self-employed/employed. The cleaner can't just decide she is employed/self employed.

Here is the link to the guidance.

TheDoctrineOfSciAndNatureClub Wed 13-Feb-13 16:18:27

<applauds Mr A's patience>

MrAnchovy Wed 13-Feb-13 16:51:38

I don't think this is the place for a full analysis of the whole of employment law, however I will try to provide some answers:

"surely you are not allowed to take the cleaners word for it that she is self employed?"

No - what the cleaner says is irrelevant. The person engaging the cleaner determines that they are not employing the cleaner and therfore they are not liable to operate PAYE. That is their only obligation.

"Also what difference does it make if the sitter can do what they want when children are in bed."

It removes the element of "control" which is an essential element of a contract of service i.e. employment.

"What about people on call ? They still get taxed."

Yes they do because taken as a whole their contract is a contract of service and so all payments made under it are taxable as remuneration.

spekulatius Wed 13-Feb-13 17:06:58

This seems to be going the wrong way. My only question was if it is illegal to pay a friend who is not registered to look after our daughter while I'm at work (in her own house I should have added). From the documents that somebody has linked its clear that it is so we need to look at other options.

I thought Mumsnet is about support, advie and experience, why are some people so aggressive? Not only in this thread BTW.

MrAnchovy Wed 13-Feb-13 17:24:48

"Guidelines from HMRC decide who is self-employed/employed."

Actually that is not true. HMRC use those guidlines in order to determine employment status for Income Tax purposes (and by implication for National Insurance purposes although NI is actually imposed by a statute with different criteria), however it is generally acknowleged that those guidelines often come to an incorrect decision, with the error almost always being falsely concluding employment.

However, as HMRC themselves recognise in their internal manual, employment status in any particular case can only be decided on a detailed examination of the facts of that case and whether on balance the facts determine firstly that a contract exists between the parties, and secondly that the contract is a contract of service.

Xenia Wed 13-Feb-13 17:32:50

Control is often the key issue.

Anyway I thought it said two mornings a week so no tax issues would be likely to arise. She wants it to be care in the friend's home and to pay her and I think we answered that further up. There was a case inthe press I think about two mothers wanting to go back to work and if they swapped houses when the other was working (both part time working) they were okay. If they stayed in their own house when home then not which of course shows the regulations are ridiculous but we have to work around them.

Thanks for clarification, no idea where I got that idea from.

ledkr Wed 13-Feb-13 17:38:23

Who polices this tho? Dil looks after dds and I bung her a few quid I also pay a local teen for occasional evenings out and my pil and dm help too. Fuck em. Sick of this country telling everyone what to do. We claim no benefits so they can keep their beaks out of my business

Xenia Wed 13-Feb-13 17:40:19

Someone might report it, disruntled ex partner ( see the Huhne marriage) BUT if that few quid is not enough to take someone over the tax threshold there may well be no tax due on it anyway.

TheMightyLois Wed 13-Feb-13 17:46:06

Its not about tax really though is it, its whether someone who isn't registered can look after a child on a regular basis for payment.

TheDoctrineOfSciAndNatureClub Wed 13-Feb-13 17:51:07

From Netmums, but I think it's a couple of years old:

www.netmums.com/work-childcare/childcare-swaps-the-rules

MrAnchovy Wed 13-Feb-13 18:04:17

On reflection, I'm going to change what I said earlier:

The main reason a babysitter is not employed is that once the children are in bed a babysitter can generally do as he wishes - read a book, watch a film, do homework or marking etc.

TheMightyLois Wed 13-Feb-13 18:20:29

That's a really good link Doctrine, even if it is netmums wink.

The reciprocal childcare agreement is different - it was decided that that was fine. Its if there is a financial reward that there's a problem.

Interesting to see that there is an exemption for babysitting between 6pm and 2am though, I didn't know that.

TheMightyLois Wed 13-Feb-13 18:22:35

It is about 4 years old though I think.

ledkr Wed 13-Feb-13 18:36:22

Well dh and I work often at those times so that makes no sense.

Tanith Wed 13-Feb-13 19:00:13

Aggressive, Op??? Honestly?!?

Haven't seen any aggression on here.
Have you been introduced to the vipers ladies on AIBU, yet? :-D

MrAnchovy Wed 13-Feb-13 20:12:48

Doctrine all the information on that link has been superceded by the regulations explained in Flisspaps link in the third post in this thread. It would probably have been best if that had been left as the last post too.

Flisspaps Wed 13-Feb-13 20:18:05

MrA grin

TheDoctrineOfSciAndNatureClub Wed 13-Feb-13 20:32:23

Ah, sorry blush

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