Super confused about car insurance - I am a nanny(6 Posts)
Hey everyone I am confused about a few things I have read on here lately and would love for someone to deconfuse my poor tired little mind.
Firstly, all this car insurance stuff. I read that Northern Ireland thingy here and it seems to say, if I am not mistaken, that having business class insurance is not valid if you are getting paid whilst you are in the car ? If this is the case why did my insurance company tell me that paying the extra for business class insurance would be appropriate cover - did they assume I was not being paid an hourly rate ? So how is it meant to work - the instant I get in the car I am no longer paid an hourly rate and the business insurance is valid; but if I get paid an hourly rate I need to have a taxi drivers licence etc??
Does anyone know who I should contact to clarify this as I am not the sort of person to break the rules and now I am a bit worried.
Also the other thing is all this gross v net pay - everyone is saying to agree a gross wage, is that right? If so why? I get the fundamental different between gross and net but I don't see the advantage of agreeing gross.
Re the car insurance - make sure your insurance covers 'hire and reward' I know that Morten Michel's does.
The net v gross wage. If, as usually happens, in the budget the tax allowance goes up (2007/8 is £5,225 - 2008/9 is £5,435) If you are paid a net wage you will not benefit from it. So if you get £400 pw net you will still get £400 pw net. Your employer will pay less tax. If you are paid £500 pw gross you will get more wages after tax and your employer will pay less tax.
There's a bit more to it than that - I'm sure someone will be along to fill us in. This is just the basic bit that I understand.
Car Insurance - I don't think we will ever know for sure what the situation actually is. Insurance is such that in the event of a major claim... you can be assured that the insurance underwriters will look at what they can do to reduce the amount they have to pay out. Therefore the more we try to get appropriate cover, the less chance there is for the underwriters to claim that we didn't give them the full picture. It needs cases to go to court - so that everyone knows what is and isn't covered.
For now, the best you can do is to make it very clear to insurance providers (often brokers) exactly what you are expecting cover for. Get in writing from them what it is they are covering.
Childcare insurance specialists have agreed specific policies with some underwriters. Layton Blackham and Morton Michel are the two major players.
Gross v Net wages
For employers, agreeing a gross wage makes total sense, as they have to do PAYE based on the Gross wage, not NET. It is horribly difficult to calculate Gross wage from a Net starting point.
With a NET wage, the employer needs to work out what Tax, Ni and Employers NI need to be added to it. Calculating that is hard, not even sure I fully know how to do that.
If employers can work out how much a nanny will cost them, in advance, it helps prevent situations where parents think they can afford a nanny... hire a nanny, then after a few months realise that the costs are a lot higher than they initially thought.
Tax rates change - they go up and down. Typically the personal allowance increases. Using ListenToTaxman you can compare against previous years, to see what changes have been.
For example, with a Gross Salary of £20,000
In 2008, you get 98.50 more take home pay, than you would have got in 2007.
In 2007, you got 68.56 more take home pay, than in 2006.
Don't assume it always goes up though, as in 2003 you got 148.92 less than in 2002.
Tax rates change, sometimes for the better, sometimes for the worse. Generally I would say that take home pay goes up, with tax changes, even if you don't get a pay rise.
With a net wage, you would not see any difference between tax years.
Thinking of buying a house? To get a mortgage you need to prove your income. Your payslips and P60 will be useful to refer to when completing a mortgage application. If your employer is starting from a Gross salary, the chances are that they will be producing a payslip, which shows the deductions made. If they start from a Net salary... are they showing the amounts of tax/ni being paid? Is the payslip easy for the mortgage company to read, to establish what your income is, before tax.
You could argue that it isn't to your advantage as a nanny. But, if you are not paid like other employees in other jobs, does it make you part of the underclass... does it mean that you are not doing a real job?
As I am for having Gross wages...
Can you tell me why you would want a Net wage?
Hey everyone thanks very much for the help - I think on the insurance front I am going to call my insurance and ask them what the deal is in black and white to back it up, then if I am not covered approriately I am going to have to somehow get out of my current insurance policy and change it to another. Maybe breach of contract is a possibility as I expicity asked Admiral if I was covered as an hourly paid nanny and they said says - so although not in wiritng the contract term would be an implied term so might just get away with it if I spout enough hot wind. I will post back and let you all know how it goes!
nannynick I don't particularly want to be paid any particular way (net v gross) I was just a bit confused by it - but having read your explanation I will certainly be agreeing a gross wage from now on - in situations where I am an employee. I see your point now on the whole tax allowance issue and I didn't realise that calculating NI etc was so complex from Net.
The family that I work for agreed a Net wage with me, I went through an agency and as this is my first nanny job I didn't realise what we were doing wasn't the best way to go about it - as all my past jobs had been agreed a gross I should have been more clued in really. The family have used nannies for nearly 10 years and have always agreed Net - I still get a payslip and p60 though detailing PAYE & NI & Student loan repayments. I didn't ever think some nannies don't get payslips - why would they opt for that, seems silly to me?
Oh and can you get an online quote from MM does anyone know? Can't seem to find the right bit of their website!
No, for car insurance you need to phone them. They have many questions they need to ask, took me about 15-20 minutes on the phone with them to get a policy.
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