Nanny leaving

[Countessofgranthamm]

Nanny leaving who has been with us 3 and a half years. Is it unreasonable to just give gift and a card or is it customary to give money too? We are moving overseas for DP work so I suppose we are technically the ones leaving! She is the first nanny we have had to unsure of the customs?

@Countessofgranthamm

this will help you calculate how much redundancy you SHOULD pay her.

OP’s glad she asked 😂

Then she isn’t truly a nanny and is a childminder who maybe comes to your home. A nanny you pay a salary with PAYE, pay into a pension, NI etc. What you are describing is a childminder, but I digress….

As she is a childminder I would say yes to cash parachute, card (by the kids if of age) and gift.

She’s not a childminder either, they don’t operate in the family home, they only operate from their own premises.

just for a rough idea @Countessofgranthamm she will be entitled to

You get:

• 0.5 week’s pay for each full year worked when you’re under 22
• 1 week’s pay for each full year worked when you’re between 22 and 41
• 1.5 week’s pay for each full year worked when you’re 41 or older

I’m making my children’s Nanny redundant due to a change in circumstances which means I’ll no longer need the majority of what she used to do.

Under HMRC rules, it’s pretty hard to argue that a Nanny is not an employee, especially if she only works for your family.

Since my children’s Nanny has been with us, I’ve paid employees PAYE, NI and student loan to HMRC, as well as all employers contributions and pension (auto-enrolment means you have to do this, unless your employee opts out). You should have been doing the same.

Redundancy for my children’s Nanny is 4 weeks’ pay, and I’m also making her a big hamper of all the things I know she likes, so it’s a really personal gift. I would definitely get her some lovely things to show appreciation, she’s been looking after your DC all this time!

Ah come on now Cora you know she's not really self-employed 😒

Yep, you didn't do an IR35 check on this re self employment, did you.....

Hi, I work in compliance for HMRC.

If the Nanny is providing you with a personal service (ie, they don’t have the freedom to send you a replacement person to do the work), you have control and direct them, they have limited financial risk (you cannot use a contractual clause to force them to correct errors in the work in their own time) and they only provide the service to you then you have yourself an employee.

They may still be an employee even if they work for multiple families. You can have several jobs.

If you have an employee then you should be deducting income tax and NICs at source. They’re entitled to minimum wage, holiday pay, redundancy etc.

The onus was on you to check prior to engaging and paying them.

Even if the Nanny wants to be treated as self employed and paid gross then that is not in the gift of either of you to decide.

I would get some advice starting with the CEST tool.

https://www.gov.uk/guidance/check-employment-status-for-tax

HMRC can definitely look at this retrospectively, raise assessments and look at penalty behaviours.

I think Carson definitely fluffed up this engagement …

What does it say in her contract of employment?

Assuming you gave an employee of yours a contract when she commenced in post?

This

@Starseeking great post but sadly not all employers are equal!

It would be very unusual for a nanny to be self employed OP. It isn't up to you or her to decide that, there are rules and it is up to the employer to ensure they are followed. It seems likely you should have been sorting tax, NI and pensions and will need to pay redundancy....

Indeed! The real Lady Grantham would have put nanny in a cottage on the estate!

I was a nanny for a long time. The usual thing is that if she leaves ( on good terms) you do a card, flowers and either a nice bottle of wine or a gift card of equivalent value if she doesn't drink.

If you're leaving and she has done a good job, a card, 2-3 months pay and a little personal gift (maybe a photo of the kids in a nice frame). You legally owing her redundancy isn't relevant, this is the right thing to do.
She has been helping you raise your children for three years and you are ending her employment.

So you’ve been stiffing her on National Insurance and now you're stiffing her on redundancy pay? Have you stiffed her on holiday and sick pay too?

I get that it can be a bit of a shock to realise you haven’t been employing someone properly, that you are one of the employers people talk about when they discuss worker exploitation. Nannies are frequently the first and often the only person many people employ, and the idea of taking on all the responsibilities that an employer has is a bit foreign. Probably seems like overkill and like you’re giving all this money to the government just so you can give someone a job. So why not do the whole self employed thing so it’s much simpler (and cheaper!)?

But a lot of it, especially the NI, pension, holiday, sick and redundancy pay are hugely important to the person you employ (even if they don’t realise it or are so desperate they’ll pretend it’s fine). YOU are responsible for these payments. They are on top of her salary. You may well find if you calculate everything you should have been paying that in effect you’ve been paying under minimum wage.

They are a part of legally employing someone. You have an opportunity to put some of this right so work out what her redundancy pay should be, add on any pension, holiday or sick pay you should have given her. See if you can open a pension for her now and put it all in. Make any tax issues right if you’ve pushed her into a higher tax bracket because you’re paying 3.5 years in one. Throw in some more for the NI she won’t be able to now get. AND get her a card, nice gift and a bottle of bubbly.

Ah, false self employment, is it? Unless this is a nanny who picks her own hours and has other clients?

Sounds like it’s also against IR35 regulations as well as ta/ni issues. I’m guessing OP is probably on the run from HMRC now!

How many days a week does she do for you? And who chooses the days?

and how old is the nanny? And how old are the kids?

if she needs to claim benefits after you have gone you may find yourself the subject of a PAYE audit. Which HMRC will run despite you being overseas …..

(I’m in tax)

if I were you I would make her a very generous 3 months settlement of usual pay AND some gifts from the kids - hamper of her favourite foods and crafts, homemade card, photo in a frame, bottle of something lovely AND a gift card.

and write a glowing reference and help her to find her next job.

You have been very naughty and HMRC hates people like you who have avoided paying employer’s NIC as well as PAYE, holiday pay, sickness and pension.

best of luck with it.

Countess, you are employing illegally. You owe her/him 3.5 weeks redundancy pay. Who is paying her NI?

It costs me over £50k annually out of my post tax salary to employ a Nanny for my children, so I can see that it must be tempting to pay cash and leave the Nanny to sort themselves out tax wise, but it’s not a choice.

In the line of work I do (chartered finance professional), not employing properly to save a few thousand pounds would mean I’d lose my job and not ever be able to work again if HMRC ever fined me, so I never went down that route.

OP’s Nanny isn’t being treated fairly if she’s not getting all the things paid that she should. Missing NI will reduce her state pension entitlement, so she’d need to top that up if she hasn’t already.

Goodbye All, and Goodnight!

(I feel a thread deletion coming on…) 🤣

I had one of these employers- despite me asking for months they didn’t put me on a payroll for ages- then tried to withhold holiday pay I was owed when I left (I tried to stick it out for the kid who was great but his parents were absolutely horrible, I won’t go into it but they were just awful people) I took them to an employment tribunal for the holiday pay.

I had a lovely chat with HMRC after I left. And I know they were already on their radar as they’d had a hand delivered letter from them while I was there once.

In the words of Leona Helmsley "We don't pay taxes; only the little people pay taxes”