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

Presumably the nanny receiving the say £150 per week is never going to put that money into her bank account. WIll just use that as her spending cash when she goes out for the night, shopping, or whatever else she spends her money on.

I am of course just arguing a point for the sake of a debate. I don't recommend this practise.

If i withdraw a few hundred pounds out every week, who can say where i've spent it? it could be at the supermarket, on clothes, on a nanny, whatever.

but where would you get all teh cash from? The inland rev wouldn't have to be einstein to find that you were withdrawing x amount in cash every week and that that x corresponded with the discrepancy in your nanny's pay.

Unless you are in a job where you have large amounts of unaccounted-for cash lying around (eg a taxi driver maybe) then a truly untraceable transaction is difficult.

I'm not saying it's likely that this would happen or that they would go to all this trouble but personally (and I am a big wuss) I wouldn't be able to sleep at night just in case. I'm sure it's really common and all, but I'd prefer the peace of mind to the music lessons or whatever! But it's a personal decision at the end of the day.

Yes, if you were going to do this you'd have to make sure everything in writing was legit. The amount in the contract/payslips/going into bank account would all have to match up, and the rest just in cash.

Yes, exactly. The nanny will have to prove her accusation for it to go anywhere. SO, if the employer is waise and leaves no paper trail, then I imagine they get away with it.

Do you know what I think would be intereting? To compare two figures:

1- The nannytax survey on average nanny salary
2- The IR records for nanny salary in the same year.

I bet the two figures are wildly different. IR will be too low because of all the cash in hand. And nannytax will be too high because their survey targets the high end of the nanny/nanny employer market.

but she wouldn't have evidence if you paid her cash. i'm looking to contract a nanny for three days, and then she can pick up another part-time job or occasional babysitting or whatever on her other days. So my nanny will have other income anyway.
(again i stress that i am not advocating this practice, nor engaged in it.)
it would be easy for an angry nanny to point the finger, but harder to prove it, and even harder to make it worthwhile to HMRC to bother investigating it.

athene - they would know if the nanny told them.

But I agree it is pretty common in London. I think about half the people I know with nannies do this to some extent. I just think that, morality aside, unless you know the nanny REALLY well, you are asking for trouble.

It also depends on your job of course - there are some professions where you absolutely can't afford to be caught on the take.

Well, surely, artickokes would give her the money which is not on the books as cash and not wire it into her account where it could be traced.

I'm not suggesting artichoke take part in this plan for tax evasion. But, I am saying that a lot of people do it, and a lot of people don't get caught. And I think some of the people on MN are lying. Not all... but some.

I've always suspected that at least some of the people on MN are lying. My nannies always have nanny friends who are making some of their money cash in hand.

Assuming one writes the contract to match the amount they are paying on the books, I don't know how anyone would ever know.

I don't think HMRC has the resources to track down a nanny taking a bit on the side - it's more if things turned sour later then the nanny could threaten to report the evasion to HMRC. And it would be Artichokes, as employer, who would be responsible.

The nanny would have evidence from her bank statements that the pay she was receiving was not in line with the pay on her contract. I'm not saying she WOULD do that, but it's putting yourself in a dodgy position.

in SE London I am also finding that virtually all nannies, regardless of experience, are looking for £10/net. And no one wants to talk about gross.

paying part in cash is also apparently very much the norm in my area. I don't fancy doing it, but i also don't think HMRC are as clued up as the people on this board make out. They've lost DH's tax returns enough times, assigned him multiple numbers, ended up owing him money when they said he owed them, all sorts of mess-ups, that really make me doubt their abilities to nail a British nanny receiving a bit of cash on the side.

of course it's different if someone is on a student or working visa and needs to prove they are living off of taxable income.

I can't believe that in this market you can't find a good nanny to work for £10 gross and then pay for the girls to continue dance.

"I do find it odd that a nanny with one year's experience expects the same pay as someone with 20 year's experience."
I find that odd as well, it's not something I've come across. IME nannies get paid more the more quals and experience they have.

I'm not sure how people do it in the contract tbh - I guess either they put the net amount and sort out the gross separately, or put less money/hours in the contract. So, for example, they agree to pay the nanny £400 net a week - they put £300 gross a week in the contract and that's what goes through the payroll company (giving the nanny £250 net) and then pay £150 to her in cash. So the employers save £100 a week in tax. The figures there are just guesses btw.

How come no-one has mentioned the ethics of tax dodging yet?

it will work fine until she falls out with you whereupon , she will leave and shop you to the taxman...

hello arti, we're doing fine thanks! How are you?

Salary sacrifice is where you give up part of your salary (pre-tax and NI) in return for childcare vouchers. You can claim a max of £243 per tax payer per month at present.

If you are a higher rate tax payer then £486 worth of childcare would normally cost you nearly £900 in gross wages. But by salary sacrificing you don't pay any tax or NI on that part of your income.

The downsides are 1) your employer has to agree to join a scheme (if they are not already in one) and 2) your nanny has to register with ofsted in order to get the vouchers.

If your employer is not in a scheme then consider starting a petition at work - I know of several people that's worked for. It costs the employer very little and makes such a substantial saving to employees that it's really inexcusable for larger employers not to offer it.

I am intrigued by this idea of a nanny dictating what she wants paying. When I was nannying it was what the employer offered, not what I asked for.

Lower the salary instead. Say to £10 gross per hour instead of £10 net. You should be agreeing gross salary anyway.

Yes you probably shouldn't do it... BUT it is very common and I should think more nanny employers underdeclare than not in London.

It wouldn't make me doubt the nanny at all - it is quite a common practice and it's probably been the set up in previous jobs she'd had. I'm a nanny in London and only one of my previous employers has declared the exact amount they were paying me.

Don't do it.

To be honest, it would make me think twice about employing her.

The nanny is quite right - her proposed solution won't harm her (unless of course, she applies for a mortgage or loan in which case she will be assessed on the basis of her low salary) - it is you as the employer who will be prosecuted!

If you can't afford the music and dance classes, the nanny needs to come up with some cheaper altrnatives. There are lots of cheap/free things to do with children - library storytime, toddler groups etc. As a good nanny, her response to you should not be to defraud the taxman in order to finance expensive activities but some suggestions of cheaper alternatives!

DO NOT EVEN THINK OF DOING THIS!!

It will come back and bite you on the bum big time!

Do not mess witht he tax man - eventually you will lose.

Do your LO do all htese dance classes at the moment? If not then they're not really losing anything are they. It makes the nanny's life easier I know I was one for 10 years!) there are plently of other cheaper things she can do with the children, if she's not happy to do these then I would question her ability to do the job.

don't do it - it's definitely you they come after - as her employer it's your responsibility to pay her tax and NI. you don't need £70 a week to attend music and dance classes - find another way of cutting enough household costs to cover some of the classes.