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Nanny ofsted registration on payslip...

(6 Posts)
glitternanny Wed 13-Jul-11 14:48:22

I am an ofsted registered nanny and my 2 families split the cost of registration between them.

One family has added their cost towards the registration into my payslip causing both gross and net and basic pay to change as well as my tax code (which is split between the two families).

This is apparently because they have to pay tax on the cost of my registration??

Anyone heard of this before? This is the advice their accountant has given them?

Thanks.

bubaluchy Wed 13-Jul-11 15:32:10

No this isn't correct, the registration should just be paid by them as a one off payment it has nothing to do with your income. That is like a garage buying a new spanner and putting the cost of it on one of the mechanics pay slip.
It benefits the families financially not you.

glitternanny Wed 13-Jul-11 20:06:35

I've spoken to nanny tax and apparently it's right - it doesn't impact me but does seem wrong!!

mranchovy Mon 18-Jul-11 18:53:31

Unfortunately the accountant is right, that is the law - this expense fails the test of Section 336 ITEPA 2003 because it is not 'incurred in the performance of the duties of the employment' (see here).

However an employer may take the view that bearing in mind that exemptions exist for similar and possibly more tenuous expenses - such as training and membership of a very wide range of organisations, the law is wrong and he will make the payment outside PAYE.

If there is a PAYE audit, HMRC will raise an assessment and the employer will either have to pay up, or fight it probably by attempting to prove that the law is wrong (more particularly that such an expense is in fact incurred in the performance of the duties of the employment). That would require overturning of a ruling in Nolder v Walters (a case that dates from 1930) and would be very expensive.

mranchovy Mon 18-Jul-11 19:01:58

@bubaluchy the relevant difference between Ofsted registration and the mechanic's spanner is that the spanner is used to work on vehicles, whereas Ofsted registration doesn't actually help the nanny care for the children.

mranchovy Mon 18-Jul-11 19:03:33

@glitternanny "... *as well as my tax code (which is split between the two families)*" this doesn't sound right, changes to tax code splits can only be made on instruction from HMRC.

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