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What's the threshold that triggers nanny tax? And what's difference btw babysitting and nannying?

(5 Posts)
WaitingForVino Sat 31-Oct-09 16:46:03

Am using a nanny 3.5 days a week and paying (and paying, and paying...)all the nannytax required. So far, ok.

Next year DCs will need far less care as they'll both be old enough to be in school & school-based wraparound.

I am trying to figure out how many hours my nanny can work without triggering nannytax. Is it something like 10hours or more requires nannytax?

Also, would a babysitter doing that number of hours each week trigger nannytax?

THx

frakula Sat 31-Oct-09 16:55:40

It's not hours it's how much you earn - the current PAYE threshold is (I think) £125 a week so anyone earning under that from you and using you as their primary employer (with the tax free allowance). The NI limit is lower.

If you pay your nanny £12.50 gross an hour the it'll be 10 hours a week.

Someone more experienced than me will be along in a sec though!

Babysitters very rarely declare babysitting earnings, unless their a very honest person and are registered as self-employed too! But if they did then the same rules would apply.

frakula Sat 31-Oct-09 16:57:33

Sorry that's really not clear! If they earn less than £125 they don't pay tax if you're their primary employer and use their tax free allowance but NI kicks in at a lower amount, I think around £100.

MrAnchovy Sat 31-Oct-09 21:41:51

£110 is the threshold for NI (it will go up in April 2010), but if your nanny has another job you have to operate PAYE however much she earns from you.

Irregular babysitting is self-employment so you wouldn't have to worry, but if you had the same person babysit Tuesday to Friday every week say, it would be no different from a part-time nanny.

When you say nannytax do you mean you use a payroll bureau such as the one with that name?

nannynick Sat 31-Oct-09 22:56:51

I agree with MrAnchovy.
HMRC: NICs rates it's the Lower Earnings Limit that you want. At that point you need to start keeping a record. See PAYE Intro for more details.

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