you ought to register as an employer with IR but they probbably wont be interested. i did use nannytax for a year with a smilar sounding nanny pay/hours and got nothing but hassle from them. got fined £1200 for not completing areturn and everything - no ownder people pay cash in hand
You need to get your nanny to sign a P46 stating that this is her only form of income. (Box A or B). You then keep hold of this form and keep a record of any payments you make to her. As long as she never earns above the Lower Earnings Level for tax and insurance then you need do nothing more.
Take a look at Simplified PAYE. If they earn under NIC LEL (currently £90 per week) and it's their only job, you may need to do nothing. But they could have other income, so check and if in any doubt, operate Simplified PAYE unless HMRC tell you otherwise in writing. At end of tax year, you complete P37 and send it off to HMRC. Do this even in the event of it being a Zero return... at which point HMRC should then decide that you no longer need to operate Simplified PAYE.
Overthemill - why did you get a fine? Did nannytax not complete an end of year form?
Try calling the New Employers Helpline - 0845 60 70 143 (8am-8pm Mon-Fri, 8am-5pm Sat/Sun) see what they suggest. My gut feeling is that if you calculate what you expect to pay over a year and then divide by 12, and if the answer is greater than £390, then you will need to operate Simplified PAYE. I don't think you can operate Simplified PAYE some of the time and not at others.
Perhaps ask over on the Legal board with regard to Holiday Entitlement, given that contract is Zero hours.
Looks like it could get a bit messy, with earning x amount during term time and y amount (probably over NIC LEL) during school holidays. Probably best to operate Simplified PAYE and completing Zero return for those weeks where your nannies earnings are not above the 'Free Pay' allowance. See P16 and more forms for Simplified PAYE
A couple of things to add to what is already here:
Nannynick's gut feeling is (unusually) wrong: you can't average the pay over a year or whatever. If you pay weekly, and pay over the threshold in any week, you need to operate PAYE in that period. And if you pay over the threshold for Simplified PAYE (£160 per week) you will have to operate the full PAYE scheme.
Note that if you pay less than £105 per week you don't have to operate PAYE at all (you only have to keep a record of what you pay and the NI number if it is between £90 and £105 per week). Because you can only use Simplified PAYE between £105 and £160 a week it is not as helpful as it seems.
sorry offline for a while. nannytax reopened me as an employer (years before this i'd had a full time nanny) and the IR decided i'd had a nanny all the time and not filled in the returns. nannytax wouldn't sort it out - i got a letter before fining stage, passed it to nannytax and they said they'd sort it.
months later i got a letter saying they'd send in the bailiffs in 2 weeks if i didnt pay the fine (hadnt even had letter abouta fine) and it took me 4 days of phoning to sort it out. really stressful and really terrible - at a time when my dd was seriously ill etc etc. and i'd earned no money apart from tiny website business for about 6 months.
i'd wanted it all legit as my part time nanny was thinking of having another baby and i wanted to make sure she was all linked up for SMP etc.
i am now paying cash in hand to a teen for after school care (all we need now) as i cant bear the hassle of it all again. i do feel nannytax let me down as i called them , left voicemail, sent emails etc. I wonder if they are a bit big now but previously had a great service. now feel differently