Do I need to pay tax?

[Mothermotherd]

Hoping some wise MN people can help me as I’m totally confused by the many gov pages I’ve been on.

I work part time in someone’s home around 15 hours a week earning £10p/h but not all 52 weeks of the year.

I probably would earn around £7000 a year. It’s my understanding you don’t pay tax under £12,000. So I’m not needing to declare this? Is this right? Could not find a simple answer or calculator on the gov site.

Depends on your tax code!

Are you employed by them or are you self employed? And is this your only income?

You still have to declare. It doesn’t mean you pay tax - depending on all income.

I’m not on a payroll no.

so do I have to register self employed to keep doing this work?

You need to declare anything you earn.

You're also earning under minimum wage assuming you're over 25.

You need to declare via Self Assessment online. You won't pay tax if you earn under £12k pa but most likely will have to pay NI

Well that would depend on whether you are legally self employed.

If you are, you're required to register as self employed and do a tax return. You should also consider voluntarily paying Class 2 NI contributions for the benefit of your state pension, unless you're also receiving CB and have a child under 12.

But you're almost certainly undercharging for your services because you need to at least earn NMW after accounting for the fact that you're missing out on a pension, annual leave and sick pay entitlement.

Or if you don't meet the tests for self employment, your employer is breaking NMW regulations unless you're very young. But however old you are, they should be paying you at least 28 days AL, pro rata.

So it sounds like you need more advice, but need to provide more information about what you're actually doing, work wise.

If the OP is self-employed then NMW does not apply, because the self-employed are running their own business and can charge their client whatever they like. It would make sense to increase the hourly rate to the same as NMW anyway.

@Mothermotherd Yes, if you are self-employed then you have to register and complete self-assessment tax returns. You won't have to pay any tax if your earnings are below a certain level, though you should opt in to paying your own NI contributions. If you don't register as self-employed then they can fine you.

Is this the only work you do? Not sure HMRC would class you as self employed with just one customer. Sounds more like they are your employer. I think you should contact HMRC. You don't earn enough to pay tax but you do need to declare it.

And what about NI? Do you pay any? If you have kids under 12 and get Child Benefit you should be covered for that.

You need to register online with hmrc. You just need to fill in your income/ expenditure each tax year. It's not as complicated as some would think. You won't pay any tax if you're under the personal allowance, but have the option to voluntarily pay NI, which it will ask you about on the self assessment form when you fill it out.

It also means your income can be counted if you ever need to apply for a mortgage/ remortgage/ apply for finance etc. So its worth doing.

You'll be classed as self employed as long as you're in charge of setting your own fees and working hours, and you aren't subject to performance appraisals etc. Having only one client doesn't affect this.

I look after someone’s child in their home.

Ill look into registering with HMRC

Ah this is different... see below. You need to talk to your 'employer.'

https://www.nannypaye.co.uk/can-a-nanny-be-self-employed#:~:text=Under%20HMRC%20rule%20nannies%20cannot,and%20how%20to%20do%20it

You are being paid less than minimum wage OP, unless you are under 23.

Is this 'cash in hand'? Are you insured?

Oh, so you're a nanny, who legally is not self employed. So, you should be paid at least NMW, for your age and receive holiday pay. Plus see the link above.

Although, out of interest what is the difference between a nanny and a babysitter, legally?

When does a part time nanny become a babysitter in the eyes of the law, and does it make any difference?

The other consideration about declaring your income would be if you're receiving means tested benefits. If you are earning £7k pa under the table, you would also be breaking the law if you are receiving UC or tax credits.

I know, im going to address it in September when im doing work for them again.

not insured. It’s basically baby sitting

I’m not receiving UC or any benefits