Dont think she can do this even if she wanted to - just like if we go out to work somewhere we cant say this to our employer - employer must deduct PAYE etc by law. Only exception might be a nanny who does some sort of temporary/casual work - like an emergency nanny who goes in to various homes for a week or two - but then I would expect you would pay the agency and the agency would deduct PAYE. So no - dont pay her gross. The Inland Revenue will still fine you etc - if in doubt call the Inland Revenue yourself before you end up in trouble over it.
if you decide her days/hours/duties etc, then you are telling her what to do and when, and you are her employer
if you are going to be her perm job, then she MUST be employed by you, and you will be responsible for her tax and ni
if you do for any reason employ a se nanny, then when you come to paying her, get a duplicte book, and both can sign the amount with maybe something written,as xxxx is paid £x for the work she carried out - xxx is a se nanny and the amount i paid her is gross and she is liable for her own tax and Ni
not sure it would hold up in tax office etc - but it might cover your back and stop the IR from coming down on you with a hefty fine about £3000 and possibly a jail sentence
I would be suspicious. If she is going to work full time for you, taking care of your kids in your home, you must employ her and pay her tax and NI. Which kind of contract would you draw up with her if she did that?
I have a friend who is se and works as a nanny for full time for only one family. So no problem at all. As long as she can provide necessery papers for OP`s record. So there is nothing to be suspicious about.
Bluegreen - sorry but I think that you are confusing the issue here: this is not about whether the nanny has the right to live in the uk, but as to how she is taxed on her income. If you are self-employed then you are responsible for paying tax and national insurance. But if you are an employee then your employer is responsible for deducting tax and national insurance from your salary. Most individuals would prefer to have self-employed status for tax purposes as in general the rules are more generous (and it is also cheaper for an employer). However there is a fair amount of law on the issue and fulltime nannies working constantly for one family would be deemed to be an employee (and therefore it is the responsibility of the employer and not the employee to make the necessary deductions of tax and NI and pay these to HMRC).
So far the OP hasn't given any indication that the person in question isn't a UK national, so not sure why you think an agreement with another country comes into it?