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Nanny threatening with HMRC unless we give positive reference(40 Posts)
We recently had a nanny work her probationary period and due to a number of issues we agreed to part ways. The nanny was disappointed, particularly as she seems to be providing financially for her family in her home country, and wanted to stay on until she found a new job. We declined but I offered to help her find a new job so I put the word out - I was quite happy to do so as she has some good qualities, she just wasn't able to keep up with our busy lifestyle and the ages of our kids also weren't a good fit for her. But I felt she could work well for another family.
The nanny is already interviewing with some families and asked if I would support her story, which basically is that we had agreed on a short term arrangement and that she wasn't asked to leave. I declined: I don't feel comfortable, also I don't feel that there is anything to hide, after all I was happy to recommend her. As she is interviewing with people who more or less move in our circles, it can't be excluded that they would eventually learn of the circumstances anyway, so far better to be upfront.
The nanny then told me that she will report us to the HMRC for having paid her cash in hand for her probationary period, unless we support her story and give her good references.
Add to this that since she left, I heard some very negative things about her from three (!) separate sources, concerning how she behaved around one of my children. Nothing abusive but also nothing I would approve of.
What do I do now? I clearly can't stand my my recommendation anymore, but it's so tricky to give a bad reference. I am assuming HMRC wouldn't care as we paid under the threshold amount, and we have always done nannytax for all previous employees, but as she seems to be on the warpath I wouldn't put it past her to sue us if a negative reference prevents her from getting her next job. At the same time I can't lie, so if I'm contacted for a reference (which hasn't happened yet) I will have to answer any direct questions truthfully. Any advice would be much appreciated.
I'm sorry you are going through this. Firstly, it's your own fault really about not paying her tax. Why didn't you set that up before agreeing for her to work for you? Or did she claim to be self employed? One of the first things my employers do is sort out hmrc and the tax side of things. That's your responsibility as an employer.
As for the reference, does she have to know what you say? Just say she's free to give you email or number to people she interviews with and just be factual with them. It's not your place to state little whispers you've heard about her (unless it's child abuse of course) you simply need to tell future employers her good points and why it didn't work out for you. She won't know what you're saying to them.
Pay the tax like you are legally obliged to
Well you need to sort your tax situation out. Why didn't you if you normally do??
Then you need to give a fair and honest reference. Nothing more, nothing less.
If you aren't worried you have contravened tax rules and HMRC won't be interested then I would just be honest and say you can't give a reference (perhaps say she wasn't with you long enough) but yes she did work for you and left by mutual agreement.
If you are worried about HMRC then I would sort that out first...
Figure out where you stand with HMRC. If there's nothing to pay then you have nothing to worry about. Otherwise, sort it out retrospectively.
Regarding the reference either tell her you'll be honest or tell the potential employer you don't want your comments passed back to her. In Australia it's illegal for info from a reference to be given to the candidate if the referee states they want it to remain confidential, but I'm not sure about the privacy laws around this in other countries.
Provide a factual verbal reference if anyone does call for one. Provide a basic written reference if requested which is factual, stating the dates worked, duties done.
If you have done payroll correctly given the circumstances, then no need to worry there.
Were her earnings above the NI contribution limits, these are lower than income tax I think and if so did you pay them?
This was a part time role and the nanny was with us for three weeks. According to nannytax no taxes or NI contributions were due on her salary. Like I said we have always paid taxes as we have had full time nannies before, but we have always sorted this out after the trial period has ended, and have then paid tax retroactively on that period. I didn't think this was an issue?
But my question is rather concerning the fact that I recommended her to a network of friends and their acquaintances, and that I have now heard things about her which make me regret my endorsement. I actually thought you are legally obligated to leave a full reference and not just state duties, dates and so forth. I also thought that futur employers could sue if you have withheld information?
Did she give you a p45 or sign a this is my only job starting declaration.
If so then don't worry.
Are you registered as an employer for PAYE (I don't know how it works with nanny tax). If you are registered then I think you have to declare her earnings even if no tax/NI is payable so do that ASAP if that's the case.
Don't let her blackmail you. Cash in hand doesn't mean illegal as long as you kept records of what you paid her.
You're not withholding information, you're repeating heresay from a third party. Do not repeat what you haven't seen or heard yourself.
References only have to be factual. You cannot lie but you can't be sued for telling the truth.
tell her to go ahead but check your position with hmrc first
I actually thought you are legally obligated to leave a full reference and not just state duties, dates and so forth. I also thought that futur employers could sue if you have withheld information?
No you can be sued by either the former employee if you are unjustly negative or by the subsequent employer if you are incorrectly positive. You are not obliged to give any reference, you are perfectly at liberty to withold information so long as you don't lie.
You can actually just refuse to give a reference, you are not obliged to give one. Re HMRC I have no idea.
So you can add blackmail to the list of issues.
I would contact HMRC and clear that up then tell her you won't stand for being blackmailed and no, she will only be getting a factual reference I.e. Start/end dates, any sickness and that's that.
Just sort out HMRC and give her a p45. She can't blackmail you then.
Just give a factual reference - start and end date, reason for leaving. Keep it brief, no need to elaborate or pass on heresay.
Does she not realise she's risking you telling a new employer she tried to blackmail you?!
Most companies these days will only give a reference confirming dates worked and nothing else. You could do the same
Next time you must get tax sorted when you start employing someone.
Just get it sorted now, did she give you a P45 from her previous position? There may be tax owing as the tax allowance covers the period from April 2016, so she may well have earnt over the threshold from her previous job(s).
Ring up nanny tax and explain that they have given you incorrect advice and then set her up as an employee and pay the tax that you owe.
Don't be blackmailed and certainly don't give her a good reference.
If she was only with you 3 weeks I would call HMRC or nannytax or whoever you use and clarify with them what your obligations are. Tell them it was a trial and you weren't sure what to do but want to clear it up now. Then once you are clear on your position, tell her you have sorted it out. I would verbally tell her that you are not happy at being blackmailed and you therefore withdraw any support in finding a new job. Call your friends, tell them (assuming you trust them, which you probably do). If anyone comes to you for a reference don't give one. At all. It will speak volumes. Stupid woman, she sounds horrible, you had a lucky escape.
Sort it out with hmrc and she won't have the hold over you. Presumably you did check her eligibility to work in UK etc.
Does she have any proof she worked for you? Like a draft employment contract?
Sort it out with hmrc if necessary and then tell the nanny that blackmail is against the law.
As others said you should have done the tax legally
So ring up and say she worked for you date to date and you want to pay the tax on salary
If she had no other jobs then you wouldn't owe tax on a gross salary for 3w but works need to pay employers ni
Then say no to written ref. But people may call you
Just don't give a reference, you don't have to nd can she ky be sued if you give an inaccurate one.
If asked just say that you feel unable to give a reference which will give a clear message how you feel about her.
Also check with HMRC nd if they say you need to pay tax then do so asap
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