Tax and NI for nanny(12 Posts)
How complicated is it to manage this yourself?
Has anybody here done this? Or been paid this way?
I've read the thread below so now know about more payroll companies than I did before.
Any more views on these that I've not already read?
I'm a cheapskate as I am ill, not earning!
I do our Nanny's PAYE Tax and NI. It does take a little while to get your head round it, but once you do, it's actually pretty simple.
You need to contact HMRC, and register as a new employer. They will send you the "new employer's pack", which will include a CD. When you've installed the CD you will have a database, and in the database you enter your Employer details (which HMRC will give you), and those of your Employee(s).
You then enter the gross monthly pay for your employee into the P11 calculator, and give any details of SSP, Mat Pay or Student Loans paid out during the period (usually nothing for any of those for me). It will then automatically calculate the tax, Employee's NI and Employer's NI for you.
I then use those figures to create a payslip, which I give to my Nanny. At the end of the year, you can use the data from the P11 calculator to submit your end of year tax return, which for last year I got £100 credit on - think it will be less this year, as was £150 the year before.
There is a New Employer's helpline, which will talk you through the basics and get you started.
Oh and I forgot to say, I make quarterly online payments to HMRC for the Tax and NI payments.
As cosette says it`s very straightforward once you get your head around it. I did it for a few years from 2000 when it was all manual, would sit down for an hour or so every quarter to fill in the P12. Even managed to sort out her maternity leave! The main time thing was going to the post office pay the tax and NI, but now you can do that electronically. Go for it and save the cash.
I've been using Nannytax (£260 year) and they're pretty damn useless - they still haven't given me the P45 for the nanny who left more than 2 months ago or any payslips for the new one who started since - might save myself the money and do it myself (or find a cheaper company)
Nannytax were good last time I had a nanny go on maternity leave and took on a new nanny (3.5 years ago) but the same events have happened again and they have needed chasing, claimed not to have got letters containing P45s etc and then miraculously finding them... Can't recommend them at the moment!
As a nanny, I've worked for families who have operated the payroll themselves without any issues.
Give it a go yourself.
HMRC - PAYE Basics
i do our nanny's payroll myself but there were several times at the beginning when i nearly went mental dealing with inland revenue - they are USELESS and i felt at the time it wasnt worth the money i'd saved not using a payroll agendy.
however you have got the hang of it it is actually straightforward
but if you are going to be varying what you pay her a lot(eg she will be doing variable hours/overtime etc) i would get a nanny payroll to do it.
otherwise, top tip - you need the gross salary to fill in all the forms. you will probably have agreed a net salary with the nanny. you need hmrc to calculcate the correct gross salary to enter into the forms so that it works out at the correct net salary you hvae agreed with your nanny. this simple procedure, taking five minutes, could take you six weeks of SHOUTING DOWN THE PHONE (or it did me).
it is your local tax office, not the employers' helpline, who should do this for you.
if asked nicely they will then tell you the correct monthly tax, NI and employers NI. these are the basic figures you need to know every month and put on your payslips. pay your bills three monthly (just three times each of these figures). and fill in a pretty simple form at the end of the year. register to do it online and you get a rebate of about £100.
woodstock3, it is not the job of the local tax office, or the employers helpline, to work out how much gross salary, tax and NI you should pay, it is YOUR job.
If you have bullied them into doing it for you by repeatedly shouting at them on the phone, shame on you.
You should be doing these calculations every month (because the answers might change from month to month). Apart from the 'net to gross' calculation, these are all easy enough to do as long as you read and follow the instructions in the welcome pack sent to you when you registered as an employer and the updates they send each year.
But if you want to agree a net salary with your nanny, there is no easy way to work out how much the gross pay should be. Either change to a gross salary, or use a payroll service.
(sorry for hijack but this has been a long day, so...)
mrvibrating, i only DID ask them to do the net to gross calculation - which according to the employers helpline they accept they need to do as you can't accurately get it done by anyone else.
as, however, the tax office wrongly insisted for six weeks it was the employers' helpline that did the net to gross calculation and refused to do it, as a gesture of goodwill i think after having eventually been told to do it by the helpline, they volunteered the tax/NI calculations off their own bat. which i now happily do myself, i might point out, since we entered the new tax year.
as for bullying hmrc into doing anything - jesus, chance would be a fine thing.
and i didnt particularly want to agree a net salary with my nanny. but every single nanny i interviewed spoke in terms of a net salary -and being a first time nanny employer, i didnt realise this would be an issue until it came to doing their tax. next time, i'd agree gross up front and then do the calculation for the nanny to show her what she'd get net (as that's what they all want to know).
Join the discussion
Please login first.