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Would you pay a nanny cash in hand?(31 Posts)
Hi there. Just returning to work after mat leave and looking for a new nanny. Due to meet one tomorrow who sounded great over the phone. When I asked about rates she suggested she was happy with cash in hand. We've always paid tax and NI etc, but paying cash in hand would obviously massively help us bills wise, but I'm a bit worried. Firstly for the nanny themselves - isn't it better for them to have NI contributions and secondly that we could get into trouble? Am I overthinking or should we be by the book?
MrAnchivy is correct as usual. An employee has little ir no control over whether tax is paid. So why would they be liable. They would only be liable for something like claiming benefits and not declaring earnings.
The fine has gone up to 100% of the unpaid money due plus the tax/NÍ etc. It's a big gamble, especially with RTI, we hitch means HMRC are going to notice more swiftly if someone's contributions suddenly stop or start after a long absence and they'll check it out.
I'm just back home from an interview where I was offered cash in hand, this is a reason for me to decline the job as I know it is illegal and even though the parents have to pay a fee (around £3k I think) if they get caught (plus criminal record I believe!) and the nanny won't get into any further trouble, it's also a thing about maternity leave etc. because less money in your contract means less money for anything happening because what is in the contract counts - but most importantly it simply is illegal and I wouldn't feel good doing it so won't take the job.
All the parents I know (and many are in better financial situations than us)seem to pay cash in hand. In fact they all argue with me that I am silly for paying her tax and NI, and employers NI on top, and giving her paid holiday and a proper contract with entitlements she really should have by law. I value honesty very highly so whilst its a tremendous struggle (and hassle to calculate the overtime pay each month, especially now trying to operate RTI), it needs to be done. I am shocked at the dishonesty of this world. People have no incentive to not pay cash - it is a gamble but I don't think HMRC is catching enough dodgers out there (they just need to go to any neighbourhood with lots of young kids to find quite a few dodgers!)
BTW just joined, so hello everyone! are fathers allowed here or is it just mums?
No I wouldn't. As far as I know, I still have my moral compass and don't like breaking the law. Oh, and if I was silly enough to do it and got caught, I alone (not my nanny) would be stuck with the liability, fine and stain on my reputation when I was named and shamed as a tax dodger..
"Mr anchovy you are not right, if someone is a willing party to tax evasion then they are acting illegally.
I think we have had this discussion before."
We have and I don't want to waste everyone's time again as it is completely irrelevant - HMRC will not persue a nanny for PAYE that is not paid by his or her employer.
In any case that's not what you said - you said "payment of tax is a joint responsibility of the employee and employer" which is completely untrue.
No I'm afraid you can't do that Callthemidlife, PAYE must be accounted for on the date the payment is made. There is a concession for small businesses operating until 5 October 2013 which means you don't have to report until the end of the PAYE month, but depending on what software you are using it may not be possible to do this.
I'd suggest you either change the contract with your nanny to pay monthly or bite the bullet and process payroll weekly either using an agency (probably cheaper than you expect) or some sensible payroll software.
If cash flow is a problem, one way to ease the transition is to pay in the middle of the month for say 3 months (so 2 weeks in advance) before moving to the end of the month. Any changes should be discussed with the employee; you do not have to pay them compensation but it is often a good idea to time a change like this with a pay rise if one is due.
Please forgive shameless barging in on thread, but v quick qn for mr anchovy...
Nanny has always had STO weekly into bank account. Will obv have to switch to monthly pmt to deal with ridiculous PAYE changes. BUT... Can I switch to officially paying her mthly in arrears and 'lending' nanny the same money via STO every week, and then deducting the prepayments from her mthly salary. Ie changing the payslips and recording mthly but continuing with weekly cash flow? IYSWIM?
You are a nicer employer then most
Sure many wouldnt get out wads of cash and unless she signed something every week then you have no proof you paid her every week
Why didn't you send from your account tue/wed so would clear in her account Friday
Though tbh if you had paid her Friday and then cleared over the weekend then she would of had money the following week for the weekend
Ie would have been the same every week - as in would always get paid weekly just beginning of week after
I know what I mean but never comes out I mean - esp after the bewitching hour
Must go to bed lol
Oh blondes, it was when the nanny's account was with a different bank and she wanted her money on friday rather than Tues - a standing order would not clear for a few days. Going to the bank is a massive hassle in a very busy day (queues etc) compared to going to the cashpoint in my office and handing over a wad of notes.
Paying cash every week or month must be a pain. Why not pay direct into their account then no need to clear
Clearly it is not a good thing.
But op, an awful lot of people do it. I often suspect I am the only nanny employer who does operate PAYE. Two of the nannies we have had - on being given their net pay in cash (so they didnt have to wait for it to clear) asked me whether it was ok to bank it. Previous employers must have asked them to keep it under their mattress so there was no paper trail!
Mr anchovy you are not right, if someone is a willing party to tax evasion then they are acting illegally.
I think we have had this discussion before.
MrAnchovy she felt lucky to come away with any SMP.
I imagine trying to prove what you actually salary was would be a nightmare - especially if you've signed a contract which says you are going to be paid X amount, but are then given more cash in hand. Live in nannies aren't subject to minimum wage, so what is on the contract may have been very low.
Everybody should always do things by the book. It's so much easier in the long run, although 18yo's don't always realise this.
"I know a nanny who agreed to part cash in hand because she wanted the job....then became pg, and could only claim maternity pay on what had gone through the accountant, not the cash in hand."
This is incorrect, you are entitled to Statutory Maternity Pay on your total income before deduction of Tax and NI during the Relevant Period. This is true whether or not your Employer has correctly declared all or any of your income through PAYE.
Of course if an employer has bullied you into accepting CiH for part of your income they may well bully you into accepting less SMP than you are entitled to as well, and bully you into believing that you can get into trouble if you tell anyone about it - that's how abuse works.
"... payment of tax is a joint responsibility of the employee and employer and if the nanny was aware that tax and NI wasn't being paid she would also be responsible"
This is not correct. Employment income is taxed under PAYE which is solely the responsibility of the employer.
No, she is probably saying she will take cash in hand to be a more attractive candidate. I know a nanny who agreed to part cash in hand because she wanted the job....then became pg, and could only claim maternity pay on what had gone through the accountant, not the cash in hand. It was a live and learn experience for her.
No, don't do this. If she wants cash in hand she could even be committing benefit fraud. I would not want to be associated with that, you could find yourself in all sorts of trouble...
We first hired a nanny back in 2006, when most people in london were paying CIH. We spoke to someone who had fired their nanny for drinking on duty and she had subsequently reported them to HMRC for non-payment of tax.
She was quite careful about it as the payment of tax is a joint responsibility of the employee and employer and if the nanny was aware that tax and NI wasn't being paid she would also be responsible.
Its really not worth it.
I'd maybe do it if it was very short term, but if permanent, then no.
Assume if you pay her cih then she would expect more money rather then a set nett wage - you can hardly gross it up if not paying tax
Stay away from this nanny and others who suggest the same thing
You the employer will be in trouble. Not the nanny
£3k fine as bare minimum and possibly prison at the extreme
My employers pay me cash in hand. I genuinely didn't know there was anything wrong with this when I took the job as it was my first but they clearly did know. I was rather disappointed with them when I found out and will be moving on at the end of my contract to a more honest family. Please don't do this.
Thanks everyone for the advice. We're basically the type of people that do do things by the book - so that seems natural.
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