nanny wages cash in hand

agree wiht hatwoman too
come to think of it some nannies have been looking for months I 'think' pickings are quite lean round here now.

whilst not condoning it the bottom line is that many people with 2 pre-school children face the following financial decision:

1. stay at home and earn nothing
2. return to work,pay 2 lots of nursery or childminder fees and earn nothing
3. return to work pay a nanny and earn nothing or even lose money
4. return to work pay a nanny cash in hand and actually have some of your earnings left

I'm not sure what income level you face these choices (when I faced them 5 years ago it was about £30k). I went for option 3 and I am bloody lucky that I was able to because I have a dh who earns a reasonable whack. I know a lot of people think it is purely selfishness/greediness that make people pursue the cash-in-hand option but I would speculate that very often it is the reality that going back to work would simply not be an option unless they did.

Here endeth the case for better tax breaks on childcare.

I agree, I just don't understand why the gov. wont allow childcare to be tax deductable.
Approved only of course.

Would serve double wammy of allowing more '?middle income' people to return to work and increasing tax revenue (think of all the tax you would get from all these highly paid nannies)
I agree with annh and justaphase amongst other things here in my part of SW LOndon I see lots of nannies looking for jobs for weeks at a time and several have told me they are sitting on the fence about going home (obv. may be other reasons they are net teling me)

NannyL, you are arguing my point: nannies are the only acceptable childcare and not a luxury.

Dr bosses will NOt be getting rid of their nannies

there arnt (m)any other forms of child care avaliable to them.... when they are on call / have to work over time... cause they cant leave an operation going wrong mid theatre

My boss is adament that a Nanny is her only child care option (if you can call it an option?)

her collegues all agree hence they all have nannies.

If they gave up their nannies they couldnt work..... cause they know we can stay over time at no notice, and you cant do that at a nursary, and its not exactly easy or acceptable to do that to a childminder

And on the planet I occupy NannyL "people with top jobs with very high incomes" - in banking, insurance, law - are more likely to have no income at all through losing their job rather than worrying about £100 here or there. My dh is in the City and people are losing their job all over the place so the question of increasing the nanny's wages will be academic - there will be no nanny! The NHS will not be reducing the pay of their consultants but said consultants will have a smaller pot of money left over for the nanny after they have paid their increased mortgage, school fees, petrol costs, supermarket shopping etc.

NannyL, sometimes I wonder if there are two planet Earths.

just to add my bit

many nannies are employed by people on top jobs with very high incomes (ok not all)

these are the same people not likely to be as effected as £100 here or there really does make as much difference as it would to normal people.

I cant imagine the NHS cutting the pay of their consultants or GPS....
90% of the nannies i know well work where at least one parenst is an extreamly highly paid Dr!

I would say that being a SAHM in the first place is an unaffordable luxury for this nanny employer.

I have a hard time considering an expense which is incurred for the sole purpose of allowing my DH (or me) to go to work a luxury. The fact is a live-in nanny is the cheapest form of full time childcare for my little devils angels.

I suspect that if you look at the income bracket of the people that employ a nanny you would agree. You need to earn c.£30K after tax to make it worth-while returning to work.... which is what? £45K gross? (my maths may be wrong but I think thats the ball park). How many SAHM can just go out and get this sort of job? Also, how many of these jobs are available with the economy going in a recession?

So while I completely agree with you that a nanny is a necessity for a couple earning £100K+ .... it is an unaffordable necessity for the majority of families .... thus making it a luxury.

Nannies are luxury? I beg to differ. If you have two small children a live-in nanny is cheaper than a nursery or a childminder. And lots of people have jobs that include longer hours than nuseries or childminders are open.

For some people nannies are probably a luxury, but for many people they are the most cost effective childcare which allows them to keep their job.

Families decide they need an extra income so second parent goes out and gets a job?

Hahahahahaha!

And they spend the extra income on a nanny! Seriously?

Whoever came up with this argument is certainly on another planet!

My personal view - nanny jobs are cyclical because nannies are a luxury. So when the economy is in a recession nanny wages should go down.

I can argue the other side as well though - as the economy weakens some of the foreign nannies who came to seek their fortune in the UK may return home. This should lead to lower supply and support wages. I would not hold my breath though.

Nooooooo, Bink! Say it isn't so. I can't afford for the wages to go up.

Seriously, I'm sure whoever wrote the article was more qualified to speak on the subject than I am. But... I do think there is a tendancy to slant article to the horrirs of the credit crunch these days. So, I'll keep positive about the possibility of salries sliding (along with everyone else'salaries) until I see edidence to the contrary.

I'll be looking for a new live-in shortly. So I guess I'll find out soon enough.

I've read exactly the opposite prediction, AN: that because of credit crunch, families who were managing on one income may now decide they need two -> both parents working -> more nannies needed -> shortage of nannies -> wages due to go up!

It'll be interesting to see which way it does go.

The double taxation thing is the key to it I think. And it is not fair to compare to paying VAT because we pay VAT on pretty much anything we buy. Very different situation with paying employee wages.

Every other employer is allowed to tax deduct their employees' wages. Except nanny employers. If the government changed this it would largely solve the problem. And I suspect maximise tax revenues as well.

I hate when that happens!

I think the credit crunch will find more nannies not fewer working for cih. AS people are laid off from their work, they will in turn let the nannies go. The market will have more nannies than vacancies, and nannies will have to settle for cash in hand because that is what is being offered. Also because employers will feeling the pinch and looking for ways to avoid taxes.

Im not condoning the practice. Just saying that as people feel the pinch they will be more willing to take the risk of a 3k fine for immediate financial gain.

I also nanny wages are due to drop for the same reasons.

I think the credit crunch will find more nannies now fewer working for cih. AS people are laid off from their work, they will in turn let the nannies go. The market will have more nannies than vacancies, and nannies will have to settle for cash in hand because that is what is being offered. Also because employers will feeling the pinch and looking for ways to avoid taxes.

Im not condoning the practice. Just saying that as people feel the pinch they will be more willing to take the risk of a 3k fine for immediate financial gain.

I also nanny wages are due to drop for the same reasons.

I think it's a bit more complicated than that nannynick, but I live in London so my views are swayed buy that. It's something I find difficult as you know because I've posted on here about it.
Essentially I think nannies were used to saying eg £5/hr net and getting paid £7.50 (all amounts are guesses just read on) then a bunch of nannies came along and said OK I'll do it for £6/hr cash, there were generally less desirable nannies in one way or another (qualifications, language skills etc) so then the 'desirable' nannies upped their demands to £6 net so the less desirable upped theirs too.
End result is large wage inflation in nannies salaries (which there has been- making them out of the price range of lots of trad nanny employers) and lots of people mucking around/not understanding/being clear about tax/NI.
Personally I think the credit crunch/inflation will sort this out as it will make nannies even less affordable and make it even less desirable to work for cash.
I could be completely wrong

(edit I mean to imply nothing about less desirable nannies other than some people want qualifications etc)

sue - builders and other professionals can do that ( though they shouldnt) because they are se, and perm nannies CANT be se

employers try it on with the cash thing , as there are lots of people who will accept cash/or some cash in hand

yes nannies seem to be the only job that mainly talk about nett rather than gross, but dont think that is the only reason why employers do it on the cheap

janett - more fool them, and hope you said firmly NO!!!

Nick I meant they will try to get it on the cheap so "We'll pay you £20k a year gross through the books and then we'll give you £50 quid a week 'pocket money' or 'expenses'"

Do you see? Like when people say to a builder - How much for cash? - they mean 'Drop the VAT cos I know you won't put it through the books'.

janett - there's also the fact that some people are just bloody tight

Agree with nannynick - that's where it comes from, the archaic way in which nanny wages are agreed. And it's understandably galling to be in a position where you feel you're paying your own tax and then someone else's. There needs to be a shift to quote gross wages and emphasize that all childcarers pay tax. No one objects to their childminder paying his/her own tax on their fees. There's just this feeling of paying tax twice over with nannies that doesn't sit easy with many people, and I can get why.

I think a lot of nannies are still paid partly on the books and partly cash in hand.

and ofcourse if inland rev find out the EMPLOYERS (ie nannys bosses) will be fined £3k!