Nanny spending more than agreed on own expenses

[Saysomethingorwhatnot]

I’ve name changed for this as I post a lot in my usual name, and don’t want this linked to my other threads.

I am a single parent working full-time, and have a full-time live-out Nanny for my 3 primary school aged DC who does everything; childcare/activities/shopping/cooking/cleaning/washing/ironing/errands etc.

So that Nanny doesn’t need to constantly ask me for money to facilitate the above, I provide a bank card with a limited amount of cash available for her to spend on house/children related purchases.

I used to add £160 to Nanny’s monthly payslip to cover travelling round with the children (Nanny has own car), however I’ve recently bought a new car which Nanny knows she can use anytime (and actually Nanny does use my car regularly as I don’t at all during the week as I commute using trains).

A few months before I got my new car, Nanny asked if I could pay her the equivalent taxed cash (£30) on a weekly basis for petrol instead of through her monthly salary. I agreed as I know she struggles with managing her own money, and has asked me for advances at end of week 3/beginning of week 4 of a month a few times.

My bank has recently asked for my updated mobile details, and I’ve suddenly started receiving notifications. I received a bank notification today to say Nanny has spent the double the amount I advised she could spend on weekly petrol (so £60 instead of £30). Possibly because she was on annual leave one of the weeks, however my thought is that if she was on annual leave, she wasn’t ferrying the children around. Plus she has access to my car when with us, so I shouldn’t be paying her car expenses as well. I looked back through my bank statements and noticed she’d spent the same double amount (£60) a few times previously (either after annual leave or during school holidays).

I am a fair employer, paying a market rate salary, plus I give Nanny payslip bonuses and extra days off during the year. I can afford the extra amounts Nanny has spent on petrol as I earn a decent salary, however wondering whether I would be unreasonable to say no petrol expense except when with children and for only the agreed amount. It’s really quite sensitive, as she is very much part of our family, DC love her, and I couldn’t do what I do without her. Makes me feel I’m being petty to quibble over £30 here and there, but I must admit it has irked me. If general consensus is that I should leave it, then I will.

Grateful for any thoughts.

45p a mile is also taking the Mickey. It may be standard but it needs to change. I don't even drive and even I know that's a pathetic amount especially considering that petrol has gone up by almost £4 a tank this month and more than that for diesel.

There is an electric car, charged, ready to be used, when they arrive at work. They can use it all day, and leave it on charge when they go home.
I don't see why you would be paying any fuel/mileage payment to your nanny in this situation, as they do not need to use their own car for anything other than getting to/from place of work.

Could it be that they do not always start work from your home? So it may be more practical to use their car for a journey. I am struggling to think of something for a full-time nanny though, as usually they start at 7am or some such time when children are at home.

Draw a line in the sand. Now you have an electric car they can use, it makes sense to stop fuel being a permitted expense. If there is some reason why they do not like to use the electric car, then tackle that reason.

When I was first looking to employ a Nanny, I didn’t have a car, so travel money upfront was to cover if this person would have to take DC on trains and buses, and also pay for themselves. I thought £160 less tax would be more than enough given everything we do is so local (London suburb).

The reality is that I was lucky enough to secure someone who had their own car to do the job, which with hindsight was a huge benefit for me and my DC, although I had not intentionally set it up that way. Between the DC, they have after school activities every day (sometimes 2 in one day) of the week except Friday, as they go to their Dad’s every other weekend.

So instead of travel money covering trains, the payment more than covered petrol. As it was originally on payslip, tax was also taken care of. The complication arose when Nanny asked for it as a weekly direct payment, rather than payslip, and I bought an electric car a few months later.

If I ever have to employ a new Nanny, I would arrange travel expenses to be reimbursed completely separately, and only on receipt.

If you do go this giving her a payrise route, are you going to then make that effectively her pay rise for the year? I think you would be a mug to then give her another payrise on top

As you say Nanny struggles to manage her finances I would think it's more an error than a deliberate attempt to steal. However your plan going forward will sort this anyway.

Nanny works 7.30am-6pm for school aged DC (children are gone 9am-3pm) and comes to us straight from her home.

I agree there’s no reason now for Nanny to have travel expenses, however that wasn’t the case initially, it’s just that my circumstances have changed.

For me to remove the travel payment now would most definitely feel like a pay deduction to Nanny (despite her now using my electric car for the majority of the time), and it’s not something I would want to take away from her.

Putting travel payment back onto Nanny’s payslip resolves the issue for me.

You're obviously an intelligent woman. I'm pretty sure you know what has to be done. It's not complicated, no need to bring in tax and accountancy hyperbole. Just nix the petrol allowance. Done!

Our Nanny facilitates both mine and my DCs life in a way that other people would find it hard to imagine, given I am a single parent.

If it costs me a bit extra (though not when Nanny decides!), the it’s fine with me.

I completely understand, OP.

This relationship works for you and your family. Anyone with a good long term nanny knows that the standard employer/employee balance isn't as straightforward as some jobs.

I'm glad you're happy with your solution. It seems like one that will put your mind at rest and also help the nanny know what to expect each month.

It would irk me but as someone who has had a string of nannies over the years for one reason or another, if you are really able to bear this cost I would. The alternative would be far, far worse and it's surprisingly easy to weaken a nanny's loyalty by taking away anything that's come to be regarded as a perk of the job. I would do something to make sure this is the only thing like this, though.

All the posters urging you to deal with it will not provide you with someone you trust so implicitly. You are extremely lucky to have someone working at this level outside the job description that usually comes with being at that level, as you realise. Don't knock it for the sake of an amount of money you barely notice.

Your solution sounds very sensible and is surely worth far more than £160 to not damage what is clearly a very important relationship (and resource) to your family.

Given your relationship and the desire not ro upset or loose your nanny I'd approach it as follows

You are looking at finances / getting bank alerts and thinking about doing things differently (not saying not giving you 60 etc)

Have a spreadsheet with all the additional expenses hence not ringfencing that one and then suggest ways of making sure she is reimbursed

Eg if she uses her own cash for say crisps when you wouldn't use a credit card etc. There are apps for recipets/ bills / sharing costs etc, I would imagine

So she uses the credit card for x y z and you will leave £30 cash weekly / transfer it weekly / start of month etc you se tup the standing order then you halt it.

You need to overhaul your finances anyway and get more organised and more in control so use this as a prompt.

Ps I'm also in finance and rubbish at keeping control.

@Saysomethingorwhatnot It doesn't sound like she has taken £30 more than a handful of times, to be honest, so if you want to handle it sensitively I wouldn't mention the money being taken on weeks when she was on Annual Leave. I suspect in her head it was part of her salary and therefore she won't see that she's been doing anything wrong. But you need to reorganise things, as most other people have advised.

I'm just wondering whether you have given her any kind of a pay rise in the last couple of years, since her employment with you started? COL has risen considerably compared to 2 years ago And you have said she has asked for advances on a few occasions. So I'm also wondering if you could raise her actual salary to cover the £30 per week ( and maybe more than that - £2k extra a year is only a 5% rise for example) and at the same time say that your payroll people ( or HMRC) have been onto you about the tax implications and you can't continue to pay her mileage for coming to work and can only pay her the recommended 45p per mile, with written details etc, when she is working for you, so you would like her to always use your car when she is working with your DC and it will save a lot of hassle ( or something along those lines) - and see what she says.

@CantFindTheBeat @Lilolilibet @Rosecoffeecup

Considering everything our Nanny does, I do now feel a bit silly having made such a fuss over what is probably less than a total of £200 over the last few months. Also annoyed with myself for not having noticed, as you’re right, for me it’s not a significant sum of money.

I was so shocked to have seen what I thought was outside our arrangement that my initial reaction was to confront it. I’m so glad I posted here to find a way forward that was staring me in the face lol

Yanbu

@Saysomethingorwhatnot I think that the simple way to solve this: tell Nanny from now onwards, she uses your car when she working. Her car for the commute to/from work.

You then don't pay for her car fuel/repairs as that is her private vehicle.

Also as previous posters have said: tighten up finances, get her to give you receipts for everything.

The HMRC could decide to inspect your records, you have a responsibility to be able to provide records (receipts etc) for the tax returns that would be associated with paying Nanny.

First year pay rise was 3%, second year pay rise was 5%, this year (about to start) pay rise is 5% plus the petrol money now to go back on payslip will take her up another 4%.

I also paid a Christmas bonus of £500, birthday bonus of £500 and year end bonus of £1,000, all through payslip, so all taxed.

@Saysomethingorwhatnot

This is easier said than done as we all now have a very close relationship, it would like pulling up a friend (although I know she is an employee).

any tips on how to do this very very sensitively.

I think you need to give your head a gentle wobble - she is your employee first and foremost. It's great that you are friendly, but the relationship is primarily one of employer/employee.

Tell her that you'd like her to move to using your car for all work, and to keep a note of any mileage if she uses hers. Do it politely with a smile.

Wow, Nanny is doing well from the working arrangements. You are a kind employer IMO.

Nanny doesn’t appear on my tax return, as I am a PAYE employee, albeit a very well remunerated one. I also have a couple of rental properties whose income and expenditure goes on my tax return, but that’s it.

I don’t run any kind of owned business, just my life lol

Am I doing my tax return incorrectly?

Is her name "Nanny"? Why do you keep calling her "Nanny"?

I would keep an eye on all spending on a spreadsheet and adjust the bonus accordingly. If she is struggling and you can afford it I wouldn’t bring it up now however, I would monitor it to ensure it doesn’t get out of control.

Before you dive head first into what she can’t spend I think you need to have a conversation. Understand why she is using the extra money or if your suggested amount is too low. I think if you come at it from that angle you are less likely to upset her and can keep a good relationship.

Haven’t read the whole thread but some of it. If the issue is ‘agreed’ funds then it might be worth having a conversation about why actual funds have gone up and considering raising agreed rates. Sounds like the issue is the politics and not the practice here so talk to her.

But people don’t just fill up with the amount of petrol they are going to use for that day or trip? They fill the tank! So even though nanny is filling up £60 on her day off, she will still be using it in coming weeks for driving the children?

TBH OP I think paying petrol is a bit difficult to police, why now ask her to fill in a simple mileage form and pay her 45p for the journeys she does.