nanny share question re. tax and national insurance

[alderpants]

both myself and another family use a nanny for the same amount of hours term time, but then in the school holidays the other family uses her more (4 whole days) and me considerably less (1 day).
how do we both benefit from the tax free allowance a nanny is allowed and the following 10% taxable amount?
any one have experience of this? thanks!!

[Judy1234]

I think but I've never nanny shared usually it is simpler if one is the employer and then you do the sums so that the other then pays that family the cost on a fair basis. You could have two employers which some employees do have but that is just two lots of complexity so I can't see the point. I woudl suggest the one who employs her most be the employer and then you use her allowance etc on a pro rata basis depending on the use you make of her perhaps?

[DarrellRivers]

There are two ways to do it

1. A more casual arrangement where one employer (usually one with more hours) is the first employer and they pay less tax but then re-imburse the other family who do not enjoy the tax free amount at all. Works well if you know the other family etc but can lead to problems as is unofficial
   
2. your nanny can ask inland revenue to split her tax code between two employers, so you both then have the tax free amount split between you.Takes a bit of time to arrange but less prone to going wrong

[Bluebear]

I share my nanny - we calculated her salary on a gross amount and then added employer's NI and split the total so we knew how much we were expecting to pay....and then rang nannypaye and got them to work out how to split the tax code so each family was paying the correct amount.
I've done this with an 'unequal' share (we had nanny 5 days a week and they shared 4 of them) and for our current share where both family use the nanny for days.
In your situation you may need to work out how much each family should pay over a year (ie. you divide nanny's gross annual salary into 2 amounts to reflect the difference in the 'use' of the nanny) and then pay tax individually on your own parts of the salary.

[alderpants]

thanks for the replies. if we go with Xenia's idea and pay the other family a share of the tax/national insurance - how do we prove that we are doing it and is it legal? if i am not registered as an employer, would any contract that i draw up be legal?

[sleepfinder]

Speak to the people at Nanny Tax - or see their website. It explains that the primary employer (i.e. the first one) pays NI and TAX - when a seconary employer comes along they pay some NI and TAX according to how many hours / how much they pay per wk. The first family benefit from the tax free sum but the second family can end up paying a lot more than if they were the first employers.

I'm sounding confusing - see the website: www.nannytax.co.uk