does anyone do their own nanny tax?

[valbona]

hello, we've just found a (lovely, hooray) nanny for 12 hours a week. am just looking at contracts, tax, NI and everything - ugh.

is it easy enough to do tax etc yourself once you get your head round it or is it actually worthwhile getting nannytax (or similar) to do it all?

thanks very much

A former boss of mine did it all herself.
These days a lot can be done online.
You could start doing it yourself and if you struggle then get a payroll company to do it.
There is a simplified deduction scheme but MrA does not recommend it usually. As your nanny has another job it is probably best to do full PAYE.
Have a look at some of the guides on the HMRC website. Without looking it up, I think P49 may be one of the guide booklets. If you can get your head around the guides then you are doing well.
Does anyone know if the online PAYE system produces a payslip?
My boss used to do a hand written payslip on a duplication pad - that was several years ago now.

brilliant, thanks, that's encouraging ...

the other family has more hours - but is it still normal to ask them (politely) to split the tax code / personal allowance pro rata? (first thing I've got my head round this morning)

thanks again!

Personally I don't feel you should be having any contact with other employers.
If they worked for Tesco, would you be asking them?
It is up to your nanny to sort out things with their tax office, not you.
Agree a Gross salary, then make deductions as instructed by HMRC.

Ok! thanks for your advice

Hi, I've just hired a nanny and am planning to do my own PAYE. I'm a consultant myself with a ltd company though so a nanny is actually much simpler than learning how to pay myself was. I can hold your hand and answer questions if you like!

The first thing to do is call the HMRC new employer helpline (they are lovely) and tell them what you're doing. They then send you a CD and information pack which helps you get started and I use the HMRC 2010 online software to handle our payroll.

I haven't ever had to deal with two jobs, but I think it just means you put in a different tax code into the software.

And I'm going to produce payslips myself for her - just a piece of paper.

Hope that helps...

I did, and the nanny worked uneven hours around a second job. Key to it was agreeing a gross salary, and then talking to the tax office, who were extraordinarily helpful. Because the job was fairly short term (about 9 months) we left her tax allowance with the first employer.

I don't think I would have cared to cope with it if we had been mucking about with trying to get a net pay sorted out, though.

Good luck

I will be in this same position soon. How much do nannytax etc (and their competitors - who are?) actually charge for the service? Is the saving worth all the hassle trying to do this oneself?

www.payefornannies.co.uk/ charge £115 inc VAT
www.nannypaye.com/ charge £169.99 inc VAT
www.taxingnannies.co.uk/ charge £20 inc VAT per month
www.taxnanny.co.uk/ charge £109 inc VAT
www.playroompayroll.com charge from £99
www.nannywageltd.co.uk charge £115 inc VAT
www.way2paye.co.uk charge from £195
www.nannyjobpayroll.co.uk/ charge £220 inc VAT
www.nannytax.co.uk charge £270 (this may be +VAT, unclear)

That may not be all of them... but probably covers most.

If paying under £120, then it's less than £10 a month. Is your time worth that cost? Only you know that... plus will depend how quickly you can do the payroll.

Note: The figures are taken from their websites today (12 Sept 2010 at 17:30) and I have tried to not take account of any special offers (some offer free trials, reduced first year etc.) All prices are what I could work out the basic payroll service would cost - ie the things you need them to do, such as producing the payslips, producing the P60, completing the end of year return.
See the websites for full details of the service provided for the basic cost... some will offer additional services at extra cost, some will include things in their basic package which may not be needed (such as recruitment/HR helplines).

I do mine and its really easy, i wouldn't even consdier paying someone else to do it. I've found the tax office really helpful - the first few times they just told me the numbers to fill in on the sheet.
Your nanny will probably be on a flat rate 20% for a second job.

It is fairly easy to do it yourself, particularly for a second job (because the tax code she will probably have has a simpler calculation).

The online HMRC service does not provide a payslip (or do SSP or anything more than calculate the tax for the week/month), but if you are organised with keeping records it will do the job.

I am an accountant and I used do do my own nanny payroll, but that was because I didn't want to pay the £270 a year that nannytax charge. That was before the other providers such as payefornannies became established, and I think that their service at £115 a year is well worth it for the time it will save you, the help you will get with SSP, year end and other matters.

If you want something even cheaper, for a simple payroll service (rather than a PAYE agent who will deal with HMRC for you) look at www.mypaye.co.uk which will cost you just £12 a year. No hand-holding, but SSP calcs, all record keeping, year-end and more done for you.

Finally, as Nick says, her other job is her business. If she earns less than £6,475 a year in that job she may want to get her tax code split otherwise she will have to wait till the end of the year for a refund (which will be 20% of the difference between what she earns and £6,475 so may not be much). If this is the case, a decent payroll agent will give her a draft letter to send to HMRC to arrange this.

has anyone used one of the above payroll services and can recommend it? Thanks

I'd also really like to know if anyone has had any positive/negative experiences with the companies mentioned above. We are thinking of using Nannywage. Thanks!

I have used taxnanny.co.uk for 2 years now, am very happy with them, much better than nannytax I used to use for which I paid more than double. They are very quick and thorough in replying to queries about pay and have been v flexible in accommodating my changing circumstances - nanny leaving, not leaving, working extra hours etc. In the 2 years they have made one mistake, in calculating the final pay for a leaving nanny but that was a complicated calculation and they corrected it within a few hours when I pointed it out.

We've had good experience with nannypaye - I found it really helpful at first as they talked through with me issues about the contract which I was unsure about and also checked over my draft contract for free. It's all very efficient and I feel I could call on them if there were any problems or if things got more complicated i.e. if she was on maternity leave or I had to sack her. For me it is well worth the money to know I don't have to do the extra admin and I like the security of knowing that someone else has done the calculations.

Don't use Nannywage Ltd. They just 'sacked us' for asking too many questions. Friends have also had problems with them. Really regret using them.

Hello
"Nanny Numbers" offer a pay-as-you-go nanny payroll, with no yearly subscription charge!
It's only £15 per month.
The website is: www.nannynumbers.co.uk
Hope that's useful.

Claire - always useful to know about other payroll companies.

Your website is in dire need of an update, it talks about 2008/09 tax year! 2011/12 tax year is nearly upon us.

It also says, "from as little as £14 per month". From pricing? Maybe better to put different rates if say someone wants weekly payslips, vs monthly payslips.

Also if there are any extra charges such as a nanny leaves, then another nanny starts, thus the year end would need 2xP60s then give pricing for that. Avoid hiding behind FROM pricing.

I am doing it myself (straightforward one job nanny), after having used nanny tax and finding the £200 or so renewal a bit steep ! The hrmc cd is really easy to use, and for payslips I have designed an Excel spreadsheet based on what my own look like. The helpline is great too if you get stuck. If you wanted to give it a go I'd suggest you get the cd and give it a try, using the payslips that your payroll company send as an example to get the hang of it. To be honest each month is very much like the next. Don't forget to submit the year end return though !

I would like to see payroll companies used as a matter of law.
Over the years I have had many employers deal with my tax and insurance some well (usually those who had their own company!) But usually I have not even received a basic pay slip and have had to chase employers for an end of year P,60 one even failed to provide a P.45 when I left their employ.
My last employer used a payroll company and Oh the joy of having everything done properly with payslips ect. and the security of knowing the correct deductions were being made
The previous post convinces me I'm right in this! So it's alright to make a mess of your employees tax NI if you pay the fine!

The HMRC software really is rubbish (IMHO), it doesn't even pass their own standard for payroll software!

If you want to do it yourself there are other options:

12pay - free (software)
Payroo - free (internet service)
Iris Payroll Basics - free (software)

MyPAYE - £1 a month (internet service)

12pay looks simple.
Payroo offers the ability for an employee to print off old payslips (up to 3 years backdated) via the internet.

Not sure any of the systems will do payroll based on Net pay (MrAnchovy have you noticed if any of the free offerings provide that?) so another reason why agreeing a Gross salary with your nanny is important.

Not sure if the free version of Iris does net-to-gross, the paid-for versions do.

I'm pretty sure the other ones I mentioned don't, cheapest I know of that does is Moneysoft which I think is £55+VAT.