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Not able to claim the small business employers NI relief for my nanny!

(28 Posts)
testbunny Tue 13-Jan-15 18:18:41

I've just discovered this. It is so unfair! When will the government (any government, in fact) help families that employ nannies?? When you have two children, a nanny is cheaper then either a nursery or a childminder!! We are not rich!!!

Sorry, having a major rant!

Greenfizzywater Tue 13-Jan-15 18:30:33

I asked my (conservative) MP about this, was a double whammy as came at the same time as the removal of reimbursement of SSP. He said it would be politically too toxic to do anything to help nanny employers.

milkpudding Tue 13-Jan-15 19:12:58

Can someone explain what this is? We are thinking of hiring a nanny later this year, it sounds as though it may have got more expensive....

nannynick Tue 13-Jan-15 19:22:30

It has got no more expensive.

Government introduced a reduction for small employers last tax year but employers of domestics are exempt. I think it was aimed at increasing number of staff small businesses employ.

Cost for employers therefore remains at Gross Salary + Employers NI + activity expenses, mileage, misc expenses.

The new Tax-Free Childcare scheme (starts Sept 2015 for those with children under age 5) can be used. In England nanny needs to be Ofsted registered. It replaces Childcare Vouchers. If already ina voucher scheme sone may be better staying in voucher scheme, vonsult scheme provider.

testbunny Tue 13-Jan-15 21:06:54

Yes, I heard about the removal of SSP reimbursement. brilliant! I believe,however, that it hasn't got more expensive apart from that. I also understand the employers are being encouraged by some nanny tax agencies to work in gross pay as tax changes are coming...?

Blondeshavemorefun Tue 13-Jan-15 22:17:00

Still think it's wrong that nanny employers have to lay employers ni. Often £1/2/3k depending on part/full time

schlafenfreude Wed 14-Jan-15 12:32:34

Employers have been encouraged to work in gross terms for about 3 years. RTI was introduced which makes net pay agreements impractical.

It is unfair that nanny employers don't count as a small business - they are providing a job to someone after all!

testbunny Wed 21-Jan-15 21:33:18

Sorry, coming back to this late, and we would have to cover SSP for up to 28 weeks of sick leave! Really?????

Greenfizzywater Wed 21-Jan-15 21:56:37

Yup. Didn't you know, anyone who employs a nanny is a fat cat toff who needs to be taxed heavily hmm

nannynick Wed 21-Jan-15 21:59:17

Yes, it changed on 6 April 2014. Seems unfair to micro employers who now have to pay a temp plus pay the sick pay. It could be up to about £2,500 if someone was off for 28 weeks.
House of Commons, Draft SSP Percentage Threshold.

Viviennemary Wed 21-Jan-15 22:03:58

Having a nanny is not a business expense. So cannot be treated as such. Saying the Government should help people who employ nannies. You mean the taxpayer should subsidise people who employ nannies. Sorry don't agree with this at all.

Greenfizzywater Thu 22-Jan-15 06:35:24

Viviennemary no one else pays the gross salary of their employee out of their already taxed income. If you run a company you pay tax on what is left after employee's pay and other expenses. That's the unfairness

Viviennemary Thu 22-Jan-15 11:48:45

But a nanny isn't working for a company. You are not a company. She is providing a service. Same as a cleaner or anyone else who does work in the home. Lots of firms don't pay more than statutory sick pay. Not saying I approve of this. You are paying for a service. I sent some things to the laundry last week from the house as I've got behind. I wouldn't expect this to be tax deductible but if I was running a hotel then it would be.

morethanpotatoprints Thu 22-Jan-15 11:56:27

If you follow this through to its natural conclusion individuals would be able to claim for gardeners, cooks, cleaners. A nanny is a service for parents.
You can have a nanny and not even work if you want to.

Greenfizzywater Thu 22-Jan-15 12:33:17

Many people of normal means have a nanny as for more than one child it is cheaper than for a nursery.

I have a nanny, but couldn't afford the luxury of a gardener, cook, cleaner etc.

I would make the employer's income tax/NI that you pay when employing a nanny tax deductible for the employer, on the condition that the nanny is employed so that the employer can work. HMRC would be entitled to investigate and remove the exemption if it was found that the nanny was being employed for the employer to go to the gym etc!

Jinxxx Thu 22-Jan-15 12:45:46

Nanny employers already get a tax concession through vouchers as long as they use a registered nanny (or nursery, crèche etc or childminder). Why should people who use a nanny get a better deal than users of other childcare services?

scotchfreeescapegoat Thu 22-Jan-15 12:56:37

viviannemary, when i pay for a cleaner or a window washer or even a nursery/childminder i am not paying their NI nor am i taking responsibility for their SSP etc.

A nanny provides a service to their employers in exactly the same way as any other employee and the employer takes on the same responsibilities as any other employer with the exception that any other employer gets to pay the employees salary from their gross earnings.

Greenfizzywater Thu 22-Jan-15 13:15:47

childcare vouchers don't cover even the employer's tax or NI for a full time nanny, let alone the salary.

As an example - I am a GP, I qualified from medical school 15 years ago, and I am on a salary well above the national average. I am lucky that my mother looks after my kids one day a week, and I employ a nanny for the other two days.

If I had her for 3 days a week, her salary would take 80-90% of my take home wage - and I'm a relatively high earning professional. I would seriously consider not working. How on earth can that be a sensible way to get women back into the workforce and what do people on lower incomes do?

Nursery or childminder for more than one child is no cheaper.

I fully agree that it was my decision to have children etc - but there is an issue here that the cost of living, the cost of childcare and wages just don't tally for many people to realistically go out and work.

Viviennemary Thu 22-Jan-15 13:37:23

Nothing is going to convince me that nannies should be a tax deductible expense. Otherwise all other childcare would have to be also. If you are paying for a service you are contributing to that person's tax and insurance. In the case of nurseries twice over. Tax and insurance of the owner and the nursery nurses.

I think travel expenses to and from work would come a lot higher in priority than nannies salaries. Especially with lower paid workers.

Jinxxx Thu 22-Jan-15 13:52:15

The trouble is that if you argue that parents should be even partly compensated for the cost of childcare, that is going to be considered unfair by those who can't have children or who choose not to, especially if not being able to afford it comes into that decision.

Greenfizzywater Thu 22-Jan-15 14:23:07

We'll have to agree to disagree.

I assume you're happy that those who work, and would pass on that work ethic, are incentivised not to have kids or to have less, whilst those who don't work see their income increase with each child to whom they presumably pass on not such a great work ethic.

BrassicaBabe Thu 22-Jan-15 14:31:41

Saw the title and popped in to join a rant about not getting the employment allowance. But only served to get depressed about the SSP thing I did not know about.

Also just coming to the end of paying SMP which is all fine as reimbursed by HMRC but having to pay the 5.6 weeks holiday has hit us hard.

Jinxxx Thu 22-Jan-15 14:44:42

Is that directed at me Greenfizzywater? If so, you would be making a false assumption, and something of a leap.

Greenfizzywater Thu 22-Jan-15 14:59:35

No it was kore aimed at the poster above you but is a general principle that having children and working is increasingly only affordable if you are in benefits or very well paid and I don't think that is a healthy thing for economy as a whole.

OVienna Thu 22-Jan-15 14:59:51

"Government introduced a reduction for small employers last tax year but employers of domestics are exempt."

The issue for me is that nanny employers have all the OBLIGATIONS of other types of employers when it comes to honouring the employment rights of the employees - as they should. But then I believe any efforts to help small employers should be universally shared. There should NOT be a carve out for employers of domestics.

TBH - things like this just encourage more people to pay off the books too because it creates a perception the system is inherently unfair.

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