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Au pairs and RTI PAYE implications - mranchovy?!

(6 Posts)
Frakiosaurus Tue 02-Oct-12 19:20:17

I have been doing my reading and it seems one now has to submit RTI even for employees below the LEL...

That includes APs (and very PT nannies), doesn't it?

ceeveebee Tue 02-Oct-12 21:06:19

I am sure Mr A will come on here and confirm (or otherwise) but my reading is that if you are not required to be a registered employer then you will not need to submit RTI. See link www.hmrc.gov.uk/rti/employerfaqs.htm
and copied text below:

Q: Is an employer required to submit RTI returns if they do not currently have a PAYE scheme to submit PAYE returns and do not have any employees earning above the LEL?
A: The operation of PAYE remains the same under RTI. So if an employer is not required by law to complete a 'deductions working sheet' for any employee, the employer will not be required to operate PAYE, so not subject to RTI, or have a PAYE scheme.

MrAnchovy Tue 02-Oct-12 22:47:32

What ceeveebee is saying is exactly what HMRC are currently saying. But Frakiosaurus you are also correct, HMRC are also saying that RTI has to be submitted for all employees even if they are below the LEL... but it has been clarified that only applies if you actually have to register for PAYE. So if you only have employees paid below the LEL who have no other employment, you do not have to register for PAYE so you do not have to submit RTI. I think this is published somewhere in the minutes of a meeting, not sure if there is a FAQ or other easy-to-find guidance saying this yet.

There is a huge problem with this - if you are earning below the LEL then it is quite likely that you will be eligable for Universal Credit, but if you are not in PAYE or submitting self employed returns (and there a wagon load of problems associated with self employment, if the system is implemented as proposed it will be broken from day 1) there is no mechanism for reducing your benefits for employment earnings because there is no annual declaration or clawback.

The alternative would be every employer (including every au pair employer of course) registering for PAYE which has not been costed in to the proposals - and I'm not sure if anyone even has an accurate idea of how many there are.

StillSquiffy Wed 03-Oct-12 04:34:07

This is a pile of crap. Am registered as an employer as I have a part time nanny. None of my APs have even had an NI number before. Aaarghhhh.

<pauses>
<smells money>
<wonders exactly how many people in uk may need a new umbrella company>

MrAnchovy Wed 03-Oct-12 09:26:27

Yes you are absolutely right Squiffy, as things stand your AP would have to be brought within RTI.

You are also right that if the nanny were employed by a company so the AP was your only employee, the current proposals mean he would not.

I am not sure there are many people in your situation though, and although an umbrella company solution for a full time nanny would be more or less self funding if set up correctly (small tax savings because of IR35 status should just pay for admin costs), RTI should be pretty transparent for the majority of employers already operating PAYE and the impact on employment rights would be catastrophic - no more 'issues' with maternity leave for nannies for instance.

Freddie77 Thu 01-Nov-12 18:08:05

Sorry to sound ignorant but this is a completely new area for me. We've just hired our first au pair for 120 a week, she's from Spain, just arrived in the UK, doesnt have a National Insurance number and is happy just to have the pocket money while she learns the language. As this is over the threshold of 109 pounds a week, do I need to do anything? Will she need an NI number and do I need to let HMRC know?

Thank you so much and sorry if this is a really basic question!

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