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Nanny tax question

(7 Posts)
littlebearsmummy Sat 17-Nov-12 21:08:09

We are about to hopefully hire a lovely nanny part time, 16 hours per week over 4 days. She'll be continuing to work at a preschool a couple of hours a week to earn extra money. Does anyone know how it should work with her tax and specifically her tax free allowance? She will be earning under £6k net per year. Do we get the benefit of this or will her other job where she will already be working but doing less hours than for u? i hope I'm making sense!!

nannynick Sat 17-Nov-12 22:11:10

What is the Gross weekly pay?

Agree a gross salary not Net, then it won't matter what taxcode gets allocated as your cost will be Gross salary+ Employers NI.

EmmaNess Sat 17-Nov-12 22:13:04

Agree a gross rate and use a nanny payroll company. This will solve EVERYTHING.

And the benefit of her tax free allowance is hers.

SamSmalaidh Sat 17-Nov-12 22:29:19

Her tax free allowance benefits her not you confused

YoullScreamAboutItOneDay Sat 17-Nov-12 22:32:19

Sam - not if they agree a net salary, which is common with nannies.

I agree with the others. Net pay agreements are bonkers, particularly if the nanny has/might have another job. What if she upped her hours? What if she got another part time job. Just go gross.

fraktion Sun 18-Nov-12 20:16:25

It's a preschool. It'll be gross.

Agree that if you just agree a gross salary it'll be fine although you'll need to operate PAYE as she has that second job.

MrAnchovy Sun 18-Nov-12 23:10:11

1. Agree a gross salary and it will cost you the same whatever happens with her tax code.

2. This is one of the rare situations in which a tax code split actually makes sense (because she earns less than £8,105 in each job). If you are using a payroll provider they will help her arrange this, otherwise speak to the new employer help line when you register as an employer. But unless you want to learn a whole lot about payroll procedure, I'd use a payroll provider grin.

Even if you do get a tax code split in place by March 2013, this year she is likely to pay too much tax. After the end of year returns have been filed by both employers (so end of May), if she calls HMRC they should have the data to see that a refund is due.

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