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Would you / do you pay your nanny in cash?

(38 Posts)
wolfhound Wed 27-Jul-11 16:35:59

After a bit of a search, through a private advert, we've found what seems to be a really good part-time nanny (2 days a week).

The only thing is that she wants to be paid in cash and says this is how she has always worked.

Is this common? We paid our previous part-time nanny through BACS.

Would it cause problems in any way - for us or her? Perhaps invalidate public liability nanny insurance? I am a bit concerned.

apotomak Wed 27-Jul-11 16:45:52

Why would it? If you're going to put it through your books and take off income tax and National Insurace and provide with payslips you can pay in cash. Maybe she doesn't like using cards ....

minipie Wed 27-Jul-11 16:54:10

As apotomak says you could offer to pay the tax on her behalf, and therefore pay her salary net of tax in cash.

If she doesn't agree to that, but wants to be paid gross in cash, then I would assume her intention is to not declare all of the income and so avoid paying the full amount of tax. In which case, it depends really how comfortable you are with facilitating tax evasion.

fraktious Wed 27-Jul-11 16:56:55

Does she mean method of payment being cash, which isn't a problem just a bit odd, or cash in hand/under the table which isn't okay and could net you a £3k fine?

mranchovy Wed 27-Jul-11 16:58:17

'Payment in cash' usually means 'illegal employment without deduction of PAYE' which is obviously not OK, although it is unfortunately not uncommon either.

However, if you are a foreign national getting a proper UK bank account can be surprisingly difficult and takes time so we have paid in cash in the past (with PAYE and payslips where appropriate of course) where this is an issue.

FruitSaladIsNotPudding Wed 27-Jul-11 17:02:38

You pay the tax for your nanny, right? In which case it shouldn't be a problem.

No one I know does this though, I don't think it's usual.

mranchovy Wed 27-Jul-11 17:03:07

Minipie, under the PAYE system that is how you MUST pay anyone employed in the UK. If you don't do this as an employer you are not facilitating tax evasion, you are yourself commiting fraud - the employee is not normally liable to HMRC for unpaid PAYE or any penalty.

minipie Wed 27-Jul-11 17:20:05

Didn't know that mranchovy, thanks. I was thinking of builders etc but then I guess they are self employed whereas a nanny is an employee.

How does it work with a nannyshare though? Who is the employer who does the PAYE bit?

mranchovy Wed 27-Jul-11 17:32:38

In a 'true' nannyshare (where the nanny looks after all the children at the same time), the parents employ the nanny jointly so there is one contract, one employment, one payslip etc. How the parents split the cost of employer's NI and operating the payroll is up to them.

mranchovy Wed 27-Jul-11 17:36:32

... in legal terms, the employers are jointly and severally liable for any PAYE liability, redundancy pay, unfair dismissal, workplace injury claim etc., which basically means that it is a very bad idea to get into a nanny share with someone you cannot trust.

minipie Wed 27-Jul-11 17:38:34

Thanks mranchovy. Good to know.

RitaMorgan Wed 27-Jul-11 17:41:54

I makes no difference whether you pay her by cash, cheque or into her bank account surely?

HalfPastSeven Wed 27-Jul-11 17:52:06

As others have said, by asking you to pay in cash she probably means she does not want the income reported, meaning you may be committing an offence by not operating PAYE and she may well be planning to claim benefits without declaring the income.
I would only agree to pay cash if she agreed I could operate PAYE and do all the paperwork. Given she would be quite part time, it woudl be worth checkign whether you are below the threshhold for PAYE. I think (but am not sure) that if you pay less than a certain amount a week (possibly around £90), you do not have to operate PAYE. Not sure if the threshold is lower for part time workers though.

mranchovy Wed 27-Jul-11 18:04:21

If she has another job, you must operate PAYE. You can only not operate PAYE if you pay less than £102 a week AND you have a statement from her in the form of A or B on the P46 form.

WindyAnna Wed 27-Jul-11 18:18:45

I've paid nannies in cash but always done PAYE, one of them was paying it straight into a saving account which I couldn't BACS into. I even did it for someone who was only working for me one day a week and was under threshold as my payroll company advised me it was safest as I only had her word she wasn't working elsewhere not the P46.

Windy

loathefacebook Wed 27-Jul-11 18:49:25

What happens if she starts a claim against you that you in fact DID NOT PAY HER? If paying in cash I would only do this subject to him/her signing paperwork confirming receipt of payment.

wolfhound Wed 27-Jul-11 18:55:32

yes, i think the problem is that she does not want it to be under PAYE, i.e. that she doesn't want the tax reported.

If we are responsible for the tax, then I don't think I feel comfortable with that. It is a big shame as she seems perfect for the job in every other way. I suspect I am going to have to begin the search again.

annh Wed 27-Jul-11 22:19:21

You could try explaining to her that if you are caught, it is you, the employer who will be prosecuted and fined for tax evasion(i think c£3k fine plus all the unpaid tax!) so the problems of this kind of arrangement all lie with you. Apart from being illegal, it could have serious repercussions for you depending on your line of work e.g. if you are an accountant.

Dozer Thu 28-Jul-11 16:19:55

Yes, you'd be the one who'd be liable, committing fraud etc. In some jobs (eg public sector) getting done for tax evasion could be a sackable offence. Not good plan.

HeatherSmall Thu 28-Jul-11 20:22:43

I would want a paper trail but that could be you withdrawing the £100 at the same time every week from the cash point and getting her to sign for the payment.
I used to get paid in cash every week from Marks and Spencers but we had to sign for it.

mollymole Thu 28-Jul-11 20:27:38

if she wants paying in cash to avoid PAYE then she is basically dishonest and not the sort of person you want looking after your child - stay well away and look for an honest person

redglow Thu 28-Jul-11 22:12:02

Could your nanny not be self employed if so she would be liable and not you.

breatheslowly Thu 28-Jul-11 22:15:48

A nanny doesn't meet the criteria to be self employed, it isn't a choice, it is based on a set of criteria and a nanny would definitely come out as an employee not self employed.

redglow Thu 28-Jul-11 22:19:53

I had two jobs and was self employed.

RitaMorgan Thu 28-Jul-11 22:33:19

Unlikely to be able to be self-employed in a regular part time job. I am a self-employed nanny but I do emergency childcare/ad hoc days, set my own hours and availability etc.

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