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Nanny share, Tax and NI implications(13 Posts)
Those of you who nanny share, please could you fill me in on how you deal with the tax and ni? I am a bit clueless on all things nanny related because had always thought I would put ds in a nursery...
I've just joined Top Nanny Payroll Services at www.taxnanny.co.uk
They were very helpful with my nannies tax and it only cost £89 or something like that for the year. Another company was wanting £260!!! for the same work...Barking Mad!!
I used to nanny share. Both families paid to join a payroll service (we used nannypaye - they are at nannypaye.co.uk..always very helpful and lovely). We let nannypaye now the situation and they sorted out individual payslips from each family to the nanny and told us how much to pay.
We employed the nanny with a joint contract and on a GROSS salary so we knew exactly how much we would be paying out, we told nannypaye what proportion of the gross salary would be paid by one family, and by the other. eg. at one point I used 5 days and other family used 3 days so they paid half the gross amount of 3/5 of the salary and I paid the remainder...later when we both worked 5 days we changed so we paid 50% of the gross salary each.
It is much more complicated in my opinion if you are employing a nanny for a couple of days a week and they are already employed by another family for the other days as the other family will already be using up the nannys tax allowance..but as long as you agree a GROSS salary with the nanny it is fine as then you only pay the same amount even if a higher proportion of it is to the inland revenue than if you were sole employer.
Does that make sense? Sorry if I've explained it badly.
Ah you see I will be doing exactly that, taking on a nanny who already has a family and needs to fill her spare days as it were.
I am narrowing it down to between two nannies and both said not to worry about the tax because their other family pay it but that is clearly not the right way to be dealing with it. One nanny's family pay her through a company vehicle. I am not sure about the other one. When I make my choice I should probably speak to the other family. Decisions decisions. Thanks for your replies.
Spotty, easiest to keep the tax situation as simple as possible in your case I feel. Leave the nannies current employer using the personal tax allowance, and get your new employee to complete a P46 (in your new employers pack, or get one sent to you via HMRC employers helpline), such that when in your employment tax is at basic rate.
Agree a GROSS salary, so should HMRC decide to issue a coding notice (change in nannies tax code), then you just apply the new tax code and calculate appropriate deductions.
The new employers pack explains quite a lot about doing this sort of thing. If you are not yet a registered employer you can read parts of the new employer pack online at HMRC's website.
The Employers CD-ROM makes it reasonably easy to run the monthly payroll (would suggest monthly, rather than weekly).
If you agree a gross salary rather than net (which is the way everyone else in the UK except nannys usually get paid) then you don't need to discuss as much with the other family, just assume that every penny that nanny gets paid has to have full rate tax paid on it so adjust your pay offer accordingly.
Good luck - the nannys are mis-guided (at best) in telling you to 'forget the tax', if you do and get caught it is you who has the enormous fine (I think it's 3000) etc, not them!
Please don't group all nannies as being the same. I for one am promoting to the industry (nannies, employers and agencies) that they should be talking GROSS salary, not net.
Thanks. I will reiterate it is gross per hour, get the new employer pack etc and just make sure we are doing it correctly. I suppose if the other family are doing a dodgy cash in hand deal then I will get the benefit of her personal allowance anyway.
Ta for all your help ladies.
NN - sorry. I know you understand and promote gross pay.
Spotty - Good luck (I was also wondering if the nanny with the dodgy sounding 'employed by company' thing might more or less of a bother to employ). I'm looking for a new nanny at the moment and it's so stressful so I wish you all the best!
ru allowed to do a few hours if being nanny before you can get tax, is there such thing? What wud be the limit?
UK tax payers have a personal allowance, which includes a certain amount which can be earned per tax year (Tax year runs Beginning of April to End of March) before paying income tax.
Income Tax Allowance
Paying Someone For The First Time - P49 This document says that employers must keep track of wages, where those wages are £84 per week or above.
So yes you can do a few hours as a nanny before paying tax, but it would depend on your own personal situation, especially on total earnings during this current tax period. If you want advice in this area but prefer not to contact your local tax office, then the CAB can often help explain how this works.
I think the limit is about 96 pounds per week, but you would need to check.
I probably just leave it for now, as iv'e got bit of work at the mo, but then when i'm sorted do it all proper n work fulltime
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