Our nanny has suggested we only declare 50% of her hours for tax purposes WWYD?

I've been in situations where i've found a really nice family but they just can't afford me or are surprised about expense of nannies etc. and i've wanted to offer them less cos didn't want them to resent having nanny cos of cost but not willing myself to take a cut in salary. Silly and wrong i know and in the past.

I've also had friend (really- not me!) who had to fill in tax declaration form form and IR got a HUGE amount back.

When you actually get that form specifically checking salary and sit down with it and have to fill in details and sign to say its accurate, not misleading, false etc. and hope your nanny lies the same and is comfortable enough to do so too at the time, you might wish you'd played by the rules.

depends where you are in london but 8net seems to be absolute minimum and 12 net is totally poss. ime.

It is usually employers who suggest this. It doesn't benefit the nanny so why should she? Hmm .

Or, she wants to go to the music classes so she can have a break and have a place to meet up with people.

I guess the advantage for the nanny is that she does get to split the difference in the initial job offer. So, the employer says I have x to spend on you. I can give it to IR or I can give it to you. So if nanny signs up to tax evasion she gets a bit more money (but less proof of income). But, squiffy makes a good point. Why would the nanny suggest this after she has already negotiated her salary.

I would find a nanny to work for less than £10nett (and I'm sure I could) and then have a bit of money left over for dance. I can't see paying the nanny so much that my kids activities/education/development/social life suffers for it. Although we are rather committed to the whole dance thing in my house -- much to my DD's disgust.

Or, she just wanted to help the OP out in saving some money?

TBH if a new nanny suggested this to me I would be wondering if I had hired the right person.

I cannot think of any reason in it for her to suggest this, other than to ensure that - should your relationship turn sour - she has a potential hold over you. Either that, or in 6 months time she will turn round and demand you 'split the difference' of what you save.

I am sure plenty of people do it, but for the nanny herself to suggest it just smells V fishy to me. And if she is willing to be dishonest with the revenue, who else is she going to be dishonest with? You?

I would never, ever evade tax.

It's just not worth it, you'd have to pay what you owe and then some, and I'd simply die of humiliation.

Agree wouldn't pay £10/hr net, have found agancies overinflate salaries and (funnily enough) don't use the differential I would for qualies/experience.

I also agree it would be a trust issue for me too, I 'need' to do everything above board (hence I have no nanny )

I think some of you would be very surprised what HMRC can find out through very simple checks.

Sack the nanny

If she's dishonest, she's dishonest ...

Not worth doing. There are two things you can never avoid: death and taxes.

Also in the modern workplace, there is a big difference between demanding a particular hourly rate for p/t or temp work, say £10 an hour, and the weekly rate for a permanent job, say £300 a week.

An example of this: if my current employer contracts me out to the private sector, they can currently get up to £1000 a day for my services. This does not mean I earn £365,000!!! (I wish!!!!!)

I am also in London and have a nanny and I have to say £10 per hour net is actually VERY high, particularly in the current economic climate. Figures quoted by nanny agencies are not at all an accurate reflection of the market.

It does harm your nanny because she misses out on NI contributions. Although that's more of an issue if she's on the cusp of employer paying NI/not paying NI....

Wouldn't do it it's illegal also wouldn't employ someone who suggested it either, it would be a trust issue for me.

And as a CM EVERYTHING i earn is declared I don't take cash at all it goes into bank by STO, and have refused mindees when parents ask me to diddle figures.

the way i see it is why should my salary not be paid in full

it is still my money and salary that i have earned - just that the family pay it on my behalf iyswim

Lowering the salary is not an option around here. All the nannies around here expect and require £10 net, all the agencies state £10 net is the norm (none of them seem to mention gross). We are lucky she is just asking for £10 net, several I interviewed expected that plus evening use of our car and gym membership!

I do find it odd that a nanny with one year's experience expects the same pay as someone with 20 year's experience.

OMG@above!!!

an 18yr may WANT?LIKE £10nett but surely no one would pay that would they - if they could get a nanny with 10yrs+ exp for that

£10nett is the higher end of the salary scale and if you cant afford it then tell agencys that your job offer is £8nett

so in answer to your Op - NO!!!! dont do it

athene - I completely misread your post . I thought you were making a completely different point to the entirely correct one you did make...I thought you were saying that it's the employer, not the nanny, who's doing the evading. sorry! just ignore me...

athene - you're right, in that it is the employer's responsibility to deduct tax from gross earnings and pay it straight to HMRC. but the tax in question is the nanny's income tax. so it's her that's not paying tax, iyswim (even if she hasn't committed an offence). just like the rest of us - our employer takes the tax off our wages - because they have to by law. but it's still our tax.

I know I said tax evasion, but I'm not sure in fact whether tax evasion, properly defined, comes into it. I wouldn;t be suprised if the offence in question - of not paying your employee's tax - has got another name.

I also had that problem when I tried to get a mortgage as I was being paid some cash as the employers didn't want to pay tax on the same money twice. They came up trumps though and wrote a letter detailing my new responsibilities and therefore the increase in salary. Mortgage duly approved.

I have a nanny friend who did this with her last job, one of the reasons she left was because she wanted to get a mortage and couldn't on what she had proof of earning, her boss used nannytax to pay her (wage slips etc) and as far as they knew and her contract stated she was on min wage, the difference in that and what she actually took home was paid cash in hand.

I must be missing a trick. I report everything

Incidentally, I don't think nanny employers are the only one practicing tax evasion. These ways can be applied to lots of types of employment. For example, the gardener who comes and does the job for less if you pay him in cash, or high cash business like a restaurant or a car park who doesn't report quite all of the revenue. I'm sure it happens all the time. Oh, let's not forget childminders who don't really report everything they take in.

Of course this stuff happens all the time.

I think it's quite common practice in London

Just because all the nannies are looking for £10/net doesn't mean you have to pay it
Make sure your contract gives the gross salary though

I'm sorry, that's ludicrous- the idea that you're withdrawing X amount every week & that can be proven to be going to your nanny- I too (like Chandellina & like everyone else) withdraw some money every week to spend on various things eg supermarket etc. Its never a standard amount. Even if it were to include cash to be given to a nanny etc, it might be part of a larger amount every week. I think that there is no way something can be traced back through that.

Personally I think all this is beside the point though. The way I think about it is- if someone wants to practice this kind of thing, they will without leaving any paper trail, its surely not that hard to do for relatively small amounts & many people do it & we all know that. I think the important thing is that it's unethical to engage in tax dodging and for me that's the most important reason to not do it (which is why I don't).

aside from whether or not you can get away with it/how likely it is you'll get caught, it's tax evasion and it's illegal. nanny has to pay her taxes just like the rest of us do.