CTC and nannys?

The vast majority of the time, a nanny is an employee. You would need to operate PAYE, or Simplified PAYE (if paying less than £700 per month gross)

Agree a Gross salary with your nanny.
Deduct from that Employees Tax and NI
In addition, you pay Employers NI

I would guess you would be paying under £700 per month, so take a look at the information about Simplified PAYE.

Makes no difference how many jobs a person has. HRMC will evaluate if they are Employed or Self Employed for each job separately. There are criteria that need to be met for Self Employment, and nannies don't generally meet it. Always assume a nanny is an employee, unless HMRC tell you otherwise in writing.

As you will be claiming tax credits, it is vital that you do things above board... no cash in hand. HRMC will want to see the payment loop... they don't give out free money! They want to see you using your tax credits to pay for approved childcare, and for you as the employer, to be completing the appropriate tax paperwork.

gilly - yes you do need to be an employer and pay the nannys tax and NI as it willbe a permament job

a nanny can not be se, unless a temp/maturnity nurse - and still some tax offices query this

a nanny can also not work for a family as a se temp nanny if she is there over 6 months,as anything over 6 months is classed as permament employment

if the nanny works elsewhere she could be se and employed at the same time ( se if temping on other days) and employed by you

sorry jura-should have re phrased it - you are right, it is the tax that is saved on the moneynot that the family gain 240ish towards childcare each month

Do most nannies already have the first aid part?

Yes, they should have First Aid training. For Ofsted approval, it now needs to be a 12 hour course, and must be less than 3 years old.
Best to check with candidates. First Aid I feel is something that the nanny should be keeping updated (every 3 years) and pay for themselves.

Also would I have to inform my house insurance company that I was employing someone on in my home?

No, it is not usual that you would have to specifically inform them. Do check your policy though, to make sure it covers you for an employee and also if there is any particular procedure your insurer requires you to follow.

Talking of insurance, your nanny would also need public liability insurance. The nanny must pay for that themselves, otherwise in the event of a claim, the policy may be invalid. Many nannies do now have insurance, but again it's something to check with candidates.

As you are only needing a nanny for a one or two afternoons (hope I have that right), you should be able to use the Simplified PAYE system for doing payroll. Max limit is £160 a week, thus I expect you can use it, as you would be paying less than that, I'd have thought.

depending on your circumstances, you can get up to £240 a month in vouchers ( friend has this)if you get top wack!!

so once you have paid fee of £100, plus £60 for 1st aid if needs to be renewed, and the nanny £60 nanny insurance ( which nanny should pay) then the first month should pay for itself

but it does seem a lot of a hassle for a nanny to do it, esp as they generally dont get any benifit from being registered, unless have a nice mb who shares the cost they save

I think the childcare voucher thing is quite complicated.

Firstly, your employer actually has to offer them. (DH is at a relatively enlightened bank and they sorted it out very early on, to our great surprise). I'm technically self employed so cannot get them.

Secondly your nanny has to be registered. They have to have a formal qualification, I think. Mine doesn't (is 45, has worked as a nanny for 27 years, but this ranks behind a 17 year old with a NNEB).

There is also a formal First Aid qualification which required 10-12 hours of tuition and then annual top ups. plus a registration fee and an annual fee.

We are not falling over ourselves to do this as we just cannot see how it is cost effective in our circumstances.

We can use the vouchers to pay part of DD's school fees, though, bizarrely - again the school (who are in general quite switched on) were very quick off the mark on this.

I think it can take a bit longer to register - I have heard up to 12 weeks from some people.

We actually got a reduction in our house insurance premiums because we had a nanny - it means the house is occupied all the time, although you might need to look into employers public liability insurance - we never bothered though, so I can't advise.

Childcare Element of Working Tax Credit can be used to pay for any kind of approved or registered childcare. Therefore it can be used to part-pay an Ofsted registered nanny (in England).

However, it is important to work out how much of the salary would actually be paid, as I have known some people to think that it is up to 80% of the total cost. It isn't. The amount is capped at a maximum weekly amount - which varies depending on the number of children.
See WTC5 for details.

yes imananny - only worth registering if eligible for tac credits - that can be checked on www.entitledto.com

good link - but still no point some nannies joining and mb paying £100 if they arent eligible

www.ofsted.gov.uk/portal/site/Internet/menuitem.455968b0530071c4828a0d8308c08a0c/?vgnextoid=738eb1ae 1a801110VgnVCM1000003507640aRCRD

here you go.

My understanding is that nannys can join the voluntary childcare register - which requires a form, £100 fee, paediatric first aid course etc. Then they can be paid via tax credits if you are eligible. I will see if I can find a link.

mb did look in to it as did my ex mb but both earn over threshold and also neither mb/db employers do the scheme

athene - the problem with nannies paying for it theirselves before an employer to be asks them is, that (like in my case) the family may not be eligible, therefore nanny would be £100 out of pocket

Au Pair, nanny... same thing.

Just kidding

You can always pay my nanny if it will make you feel better.

iamnanny - you should tell your boss that the vouchers are NOT means-tested, ie you can still use them and save ~£2200/year max even if you are a billionaire.

CTC is, however, means-tested.

Sometimes the nanny pays for her registration. As an employer, if I already employed her and then said, by the way I want you to get registered so I can use childcare vouchers then I would pay. But, if I were interviewing for a new position I would make a requirement for getting the job. I might pay to renew it.

But, childcare vouchers are different. I know nothing about the childcare element of working tax credit (or whatever it's called).

i try to be helpful notabanana

not every family can use them, for example mine cant as they earn too much, so i am crb cheacked but not registered as no point

You learn something new every day!