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Original poster

Tax question - childcare cash in hand job

29 replies

nannync · 18/10/2022 15:25

I've tried to find out more info about this online but I'm struggling. Any insight would be much appreciated.

I am a full time student and for the last few months have been helping out a neighbour with childcare. I have been having the baby at her home so no Ofsted related issues, I am not a childminder.

She pays me around £180 per week via bank transfer. It's a very casual arrangement, some weeks she doesn't need me at all so I don't get any money, other times she needs me for more hours, others for less, so it's very variable.

I'm not self employed and don't have a contract with her or anything.

Should I be declaring this money? When I've gone online to find out what I should be doing it talks a lot about contracts and clients and businesses and it doesn't really apply to our set up. I would be earning under the annual tax free amount overall for the year.

I don't want to get myself or her in trouble but I'm just not sure what I need to do. I'm too embarrassed to ask her directly as she might think I already have this all sorted out. I think as I'm not employed by her it's my responsibility to sort this anyway.

Please help!

OP posts:
wonderingwhatsnext · 18/10/2022 15:30

I would say, yes. You should be declaring the income as a self employed nanny/babysitter. You are providing a service and she is paying you for it.

StillNotWarm · 18/10/2022 15:36

180 a week is nearly 9k a year.
Yes, it needs declaring.

Original poster
nannync · 18/10/2022 15:44

I agree, I just don't know how to go about it.

www.nannypaye.co.uk/can-a-nanny-be-self-employed

This link summarises the reasons I'm finding it difficult, I think.

I'm getting more and more stressed out about it!

OP posts:

Interested in this thread?

Then you might like threads about these subjects:

Childcare & nursery Families General money
Original poster
nannync · 18/10/2022 15:47

And I'm worried about calling hmrc to get advice because I feel I should have done this sooner. I've been helping this lady out since July!!!

I initially only thought it would be for 2-3 weeks but it just ended up carrying on and I needed the money. I've been so stupid!

OP posts:
Notoironing · 18/10/2022 15:48

Your neighbour should register with HMRC as an employer, you aren’t self employed

Norma27 · 18/10/2022 15:49

Look up SA1 form on HMRC website. This will register you for self assessment. You will likely be under the limit for paying tax but you need to declare your earnings.
You need to check the employed/self employed requirements too. As it is a weekly amount, at the same place and when she decides I would make sure she doesn’t actually employ you.
HMRC can be pretty helpful if you call them too although I know it sounds daunting.
Good luck.

FlibbertyGiblets · 18/10/2022 15:50

Ummm no you are not self employed, you work for that family only, at their premises, when you are required by the family - they set the hours. You do not send a replacement if you are not available.

They are employing you as a Nanny and need to look into using PAYE/Nanny tax.

Catapultaway · 18/10/2022 15:51

Do you have any other income? It's below your personal allowance.

Hbh17 · 18/10/2022 15:55

Declare it because, even if you earn too little to pay tax, you will get National Insurance credited, which is to your advantage.

Original poster
nannync · 18/10/2022 15:59

@Norma27 thank you this is helpful

@Catapultaway no, just student finance and my nhs student support bursary.

OP posts:
Catapultaway · 18/10/2022 16:00

Hbh17 · 18/10/2022 15:55

Declare it because, even if you earn too little to pay tax, you will get National Insurance credited, which is to your advantage.

You get the credit for being a full time student anyway.

AquaticSewingMachine · 18/10/2022 16:03

If you legally count as employed, it is your employer who is considered to have done wrong, not you. You haven't done anything wrong at all.

Call HMRC for a chat to clarify things.

Catapultaway · 18/10/2022 16:03

nannync · 18/10/2022 15:59

@Norma27 thank you this is helpful

@Catapultaway no, just student finance and my nhs student support bursary.

Neither of those are taxable, so you're fine. I wouldn't bother registering personally (and I'm an accountant).

AquaticSewingMachine · 18/10/2022 16:05

Tbh, if I were you I'd probably look for a proper part time nanny job. Steady hours, holiday and sick pay, and supply of nannies willing to work PT is so low there are parents everywhere who would bite your hand off.

mavismorpoth · 18/10/2022 16:07

What you're doing is actually illegal and if it were me I'd not declare it and if I was hell bent on bringing the government into this I'd rather quit doing it. Does your friend want you to declare it? Please speak to her first, she may have just thought it was a casual arrangement between you to and rather end it than have the hassle or get in trouble for paying a non childminder to care for her child.

The law says that people who care for a child or children of friends do not need to register as childminders if the childcare is not in exchange for payment. Payment is defined as a payment of money or money's worth. If your friend pays you for caring for their child or children, you must register as a childminder.

www.devon.gov.uk/educationandfamilies/factsheet/childminding-between-friends/#:~:text=The%20law%20says%20that%20people,must%20register%20as%20a%20childminder.

Original poster
nannync · 18/10/2022 16:08

@FlibbertyGiblets you're right, I wouldn't send a replacement... theres only me!

If I was ill for example I would just cancel. She's on mat leave so it's no huge drama.

In summer they went on holiday for 2 weeks so I didn't get paid for those 2 weeks at all. It's a very variable and casual set up, seems to work well for both of us.

Not sure how the family would feel about employing me. They might just say we'll stop the arrangement which I really don't want.

I work 37.5 hours a week at my hospital placement (don't get paid for this) hours are all over the place, long days, nights, weekends so it's impossible to hold down a normal job. This set up with the family works so well for me.

The cost of living crisis is putting me under so much pressure. I have a mortgage to pay! Work crazy hours for free and really don't want to lose this income.

OP posts:
Original poster
nannync · 18/10/2022 16:12

@mavismorpoth this does not apply to me. I am looking after the child in the child's home, not in my own home.

Nannies do not have to register with Ofsted.

Also, she's not my friend, she lives locally to me but I only know her because she needed childcare. Smile

OP posts:
FlibbertyGiblets · 18/10/2022 16:14

mavismorpoth · 18/10/2022 16:07

What you're doing is actually illegal and if it were me I'd not declare it and if I was hell bent on bringing the government into this I'd rather quit doing it. Does your friend want you to declare it? Please speak to her first, she may have just thought it was a casual arrangement between you to and rather end it than have the hassle or get in trouble for paying a non childminder to care for her child.

The law says that people who care for a child or children of friends do not need to register as childminders if the childcare is not in exchange for payment. Payment is defined as a payment of money or money's worth. If your friend pays you for caring for their child or children, you must register as a childminder.

www.devon.gov.uk/educationandfamilies/factsheet/childminding-between-friends/#:~:text=The%20law%20says%20that%20people,must%20register%20as%20a%20childminder.

Not a childminder as the care take a place at the family's home.

OP listen to Catapult who has posted already.

Remember HMRC will not come after you as you are the employee.

Original poster
nannync · 18/10/2022 16:15

@Catapultaway this seems like the easiest option because I have no idea what I'm doing.

How do they 'catch' people though? Does me receiving money in to my bank account each week not trigger something?

I really am just an innocent student nurse trying to keep afloat 😩

OP posts:
Catapultaway · 18/10/2022 16:20

nannync · 18/10/2022 16:15

@Catapultaway this seems like the easiest option because I have no idea what I'm doing.

How do they 'catch' people though? Does me receiving money in to my bank account each week not trigger something?

I really am just an innocent student nurse trying to keep afloat 😩

There is nothing to catch, even if they issued a notice to file a tax return you would have no tax to pay. And they never issue a penalty in these circumstances.
They have no interest in 'catching' people like you.
And you're not employed, so don't worry about that either.
Good luck with your studies, concentrate on those.

whatamess2022 · 18/10/2022 16:23

May have missed this already, but surely the income falls under the personal allowance if you have no other taxable income?

Original poster
nannync · 18/10/2022 16:24

@Catapultaway
Thank you so much for taking the time to advise. I feel so relieved.

Thanks all!

OP posts:
Dinoteeth · 18/10/2022 16:30

Op treat it as informal babysitting with no ties.

If you attempt to declare it, your neighbour becomes an employer, requiring employers insurance, and needs to pay employers NI, you'd need to pay NI.

The whole thing becomes complicated and they'd be as well to look at a formal childcare arrangement they could then use the tax credit on and get 20% off.

Nosleepforthismum · 18/10/2022 16:34

Nope, I wouldn’t declare it. It’s a casual babysitting arrangement that’s under the tax threshold. HMRC won’t come after you, don’t worry and don’t call them.

Southlandssue · 18/10/2022 16:35

@FlibbertyGiblets is correct, they are employing you as a nanny. I paid a nanny for after school care for less hours and money than this and we had to have a proper contract, payslips etc although no tax was due as she was earning below the threshold. She was also entitled to maternity and redundancy both of which I had to deal with. Also there is admin around pensions as an employer but as others have said, it is her responsibility not yours.