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Original poster

Nannies and tax

34 replies

nesomja · 04/07/2010 19:54

My question is, how many people employ nannies and pay cash in hand without paying their tax? We are just looking into nannies and childminders - for 2 days a week, and everyone we know who employs a 'nanny' - not qualified - does it illegally, not paying their tax. We are realising that if we do pay the tax we just can't afford a nanny as prices seem to be quoted as net and in London people expect at least £8-12/hour net. Before this I always assumed they were responsible for their own tax and NI but I am now better informed...
I feel very uncomfortable about this illegal market but I also feel a nanny would be best for my son.
What do others do?

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StarExpat · 04/07/2010 21:03

I have heard of a lot of people with nannies who pay cash in hand, simply because they can't afford a nanny otherwise (even with a nanny share). I'm not saying it's right.... because it's wrong... but I'm guessing that if no one paid cash in hand, then there would be a lot of nannies out of work and a lot of parents choosing other forms of childcare. Nothing wrong with that, but only very high earners would be able to have nannies and jobs for nannies would be scarce.

frakkit · 04/07/2010 20:27

Yep you're wrong! It's not the job title, it's what they do, when they do it (their choice of hours or yours), what financial risk they take and how much control they have over their time.

Cleaners can be SE though.

Uni students I find are quite silly - they often don't earn enough to pay tax anyway so a gross salary is a net one for them, they could be getting 3 qualifying years towards their pension by working and they're probably not getting top whack salaries anyway (at least I wasn't!).

Missus84 · 04/07/2010 20:24

Yes, paying someone else's salary out of your own is expensive! Though nannies do become more cost effective if you have two or three children though, as childminder or nursery rates x2 or x3 are similar. You could try looking for a nanny share to reduce the cost though, where you share the nanny with another family? Then for instance an £8 net an hour nanny might cost each family £5net (plus tax of course).

Haliborange · 04/07/2010 20:22

I do operate PAYE for our nanny, but tbh I often think we must be in a very small minority. The nanny who has just joined us has always done her own tax and she is taking a (small) pay cut to join us, but then since I'll be paying NI, holidays etc it probably works out more or less the same.

I sometimes wish I had the balls to risk it and pay cash in hand but if I got caught it would be professionally awful for me.

Oh - one thing that might be different, but I don't know - someone once told me that a housekeeper can be self employed. so if you hire someone to look after your house and part of that is looking after your kids there may be a loophole there. Seems odd though, so someone will no doubt tell me I am wrong in a minute!

Original poster
nesomja · 04/07/2010 20:20

The people I have met are often students wanting to fund themselves through university - so you're right, it's not their career and they do exist in a shadowy world.However I'm not necessarily looking for someone who thinks of it as a career - most childminders I know don't think like that after all but are doing it for pragmatic reasons.
I guess real nannies are only an option for the rich them - my whole take home salary wouldn't cover an £8/hour nanny with the tax and NI paid and I'm a senior health professional.

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frakkit · 04/07/2010 20:15

As an employer you could end up in deep trouble with a hefty fine if you pay cash in hand. I do agree that those who make a career from nannying want it done properly - we want maternity pay, sick pay, redundancy and our full salary on our payslips as proof of earnings! People treating it as a stopgap won't mind so much about it being under the table but they probably won't stay doing it long, or want to stay under the radarfor some reason.

Missus84 · 04/07/2010 20:08

All my nanny friends get paid legally - but then all the nannies I know are professional nannies, properly qualified, insured, Ofsted registered etc and stay in their jobs long term. It's a career so they expect to be paid properly.

I suspect people who agree to be paid cash in hand aren't trained and don't really intend to stay in childcare for long, maybe have immigration issues.

Original poster
nesomja · 04/07/2010 20:03

No you're probably right, it's just that as you say, in London I don't know anyone who actually pay tax and NI. Did you quote a net or gross salary then when you employed your nanny? All the possible nannies I have met appear to be working cash in hand at the moment.

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mickytoo · 04/07/2010 19:59

You won't get anyone here admitting they pay cash in hand, because people here know they'd get slaughtered from all directions. I do pay tax & NI but I'm very much in the minority of all the people I know in London (in real life, that is). Personally I think that if you can't afford to pay the tax & NI due then it shouldn't be an option - but that's just my view. you can always look at nanny shares.