self-employed nannies and 2nd jobs

[00Amber00]

Hi everyone,

I hope you can help. I am looking to employ a nanny who is currently self-employed. I not sure how she managed to get HMRC to agree to this as from what I hear nannies due to the nature of the job can only be employed.

So my first question is - is it possible to have a self-employed nanny? I thought a contract between us could say she is self-employed and we both agree that she will be paying her own tax etc but there is a part of me that thinks that HMRC will only ever see her as employed, our contract will be declared void and I will be issued with a fine?!

2nd question - she is also looking to get a second job. In the event I decide to pay her tax, i.e. the scenario of her being employed by me - How do I make sure that I pay tax for the job that she does for me only? i.e. HMRC will just give her one code covering both jobs, right?

HELP!

First question - yes it is very likely that HMRC would see her as employed and if they do, nothing that is written in a contract is going to change their mind.

Second question - it is vitally important that you agree a gross wage with her, then it doesn't matter what her tax code is.

Thanks Mranchovy,

You confirmed what I already thought about her being self-employed, it is a shame because it would have been great to get her to do her own tax assessment forms etc. well, never mind.

re my second question, again very sensible, thanks!!!

I have in my nanny contract that it will be my main employment and that if I take on any additional work then it would be using a BR tax code. But as MrA says, as long as you agree a gross wage then you will have the same outlay however she uses her tax code.

nbee84 the 'main employment' wording is a hang over from an old HMRC (well Inland Revenue then) procedure which no longer applies. Having in your contract with employer A a clause which says that employer B has to use a particular tax code is useless - employer B is not bound by the contract and in any case has to use the tax code that is defined by the HMRC procedure or notified directly by HMRC.

If you wanted a more effective clause to go in a net pay agreement you could say 'the Nanny shall not seek to or give his consent to any request to split or otherwise change his tax code such that the full amount of his personal allowance does not apply to the calculation of PAYE due on the earnings paid by the Employer'.. or something (that could probably be drafted better).

There are more words that need to be put in a net pay contract (to make sure student loan repayments and any other deductions other than tax and NI are not paid by the employer, and ideally to deal with a non-standard tax code due to a trust fund income or similar).

Actually, forget it. It is now 2010, net pay belongs in the last century.

I have gross pay in my contract