To pay nanny cash

[Workreturner]

We have agreed this morning that will be doing 4 hours a week.

She would like cash (£9 an hour)

Do I really need to use a nanny paye system?

I would be entitled to gov contribution to childcare but for the effort involved for such few hours, not sure worth it

Thoughts?

Thanks

Of course yiu can pay in cash - cash is the only form of legal tender in UK

Senior I think op means cash in hand 🖐️

You’re quick @Seniorcitizen1

😂😂 I think senior might have been having what my granny calls a senior moment 😂😂

But thinking witty!

Do you mean 'cash in hand, off the books' or just paying yourself rather than using a PAYE system?

Obviously the former is illegal if she's not declaring the income for benefits or tax purposes, but if you just want to pay her directly, that's fine as long as she declares the income where necessary. You could pay her by standing order?

You also need to think about your responsibilities as an employer - sounds like her earnings would be too low for NI to be an issue if it's her only work, but are you required to offer her a pension unless unless she formally opts out?

I'm sure if you google 'employing a nanny uk' you'll get a full accurate explanation of all the rules, requirements etc.

Why do people always assume that if you pay a cleaner ir gardener or window cleaner or nanny in cash that they will behave illegally. The person paying in cash is not in anyway responsible for the tax of the person they are paying and has no responsibility to ensure tax and NI is paid.

A caveat - I have assumed nanny is self employed but if employed by OP then OP will be responsible through PAYE and a host of other responsibilities

Surely you can pay cash in hand and it's up to nanny to include income on her income tax return and pay over the correct tax?

I've replied on your other thread, but generally nannies can't be self employed. Google self employment and nannies. There's a lot of information out there to tell you if your nanny would be self employed.

To answer the other question, if you pay cash in hand, no you can not get tax credits for childcare costs.

If your nanny is only doing 4 hours a week, I would treat that like a babysitting situation, rather than a nanny one where they are doing 50+ hours a week

Does she work for other families as well?

I use NannyPaye, which was one of the cheaper ones, and it is still £300 a year for them to do the tax, which will be far more than she actually pays in tax, if she needs to pay anything at all

@Seniorcitizen1

I have assumed nanny is self employed

I don’t mean to be rude, but this is an area you clearly don’t have experience in. It’s not about me assuming my nanny is going to defraud HMRC. A nanny can not be self employed therefore I have obligations

There are a few, not many, situations where a nanny can be self employed. Short term nannies such as maternity nannies for example or babysitting.

However I think HMRC class babysitting as taking place between the hours of 6pm and 2am.

If this is the nanny's only job and she is your only employee you can get her to sign a declaration (used to be a P46 but its now called a Starter Checklist) to declare this is her only and main job and as long as she doesn't earn over the tax threshold then you can just pay her cash but you have to keep records of how much just in case you are ever asked to produce it by HMRC.