Nanny share tax - help

Do you know how much gross salary nanny will earn from their current employer?
Have you agreed a gross salary?
Each family is registered as an employer individually and you agree a rate for sole care and a rate for shared care with a split percentage for the shared care - is this your 45/55?

It does sound complex but having a spreadsheet setting things out can help make it clearer. It can help to use the same payroll company as the current family, as they can then see the payroll for both of the nannies employers.

Talk to their payroll provider. With net pay it will be trickier as working for you the nanny would have no personal tax allowance to use.
Being a separate employer will help reduce Employers NI and employee NI and is usually how nannyshare are done. You need to be able to account for the money you pay so you want to be paying the nanny direct, not paying the other family.

Have they said anything about splitting tax code if it is done as two jobs?
If you are paying 45% of £30,000 net then having 45% of the nannies tax free allowance would be reasonable.

We have a part time nanny who has another job in the days she's not with us. We use a nanny payroll company (WaytoPaye) for her payslips/tax etc as the tax codes were too complicated for me to be confident I'd get right.

Has the other family been an employer long? You need to also consider what happens when the nanny becomes eligible for auto-enrolment pension.
As a new employer you would not need to contribute until towards end of 2017, or Jan 2018 (if registering as an employer on 1st Oct 2016 or later).

Did they have any nanny before then?

If they started being employers in March 2015, then pension starts August 2017.

I would agree a Gross salary (so you don't end up paying employees pension contribution, or have your total costs change when tax codes change, plus your nanny gains if personal tax allowance increases) based on 55/45 split.

This spreadsheet shows how this would work along with some other examples. Grossing up (when changing from Net pay agreement to Gross pay agreement) is based on £30,000 Net pay with 55/45 split.

Spreadsheet (Google Sheets): docs.google.com/spreadsheets/d/1oZFTWQww675-dqIImaT-R4j-5Q4bpXvxtcd_OPqSNUE/edit?usp=sharing

Your payroll provider should be able to do a spreadsheet for you based on our precise figures. NannyTax and NannyPaye are the biggest providers.

Be careful about being an individual employer in this type of scenario.

HMRC have clear guidance for NIC purposes when there is a "shared resource" see
www.gov.uk/guidance/what-to-do-if-your-employee-has-more-than-1-job for further help.

Doctoratsea - interesting document, have not known HMRC to apply that to domestic employers. Looks like they could do but they might then find that they are challenged on the Employers Allowance exemption.