Does anyone employ a nanny and use tax credits to help pay for it?

[weakestlink]

Just wondering if this might be an option for me, but not sure how complicated a process it is!

nope. I should be so lucky!

We have had people post on here in the past who have tried, but we haven't heard back if they managed to do it.
I suspect the problem is the max weekly claim amounts.
Would be interested to hear from anyone who has managed to get a nanny via tax credits.

I don't think you could, because the relevant childcare has to be from a registered childminder, and a Nanny isn't a registered childminder if they are caring for the child in their own home.

In England, an Ofsted registered nanny would qualify.
In Scotland, a nanny hired via a registered agency would qualify.

I looked in to it but registering a nanny via Ofsted is far more complex in Wales than it is in England and so didnt bother but if I had been in England I would have tried.

I'm planning to for when I return to work in November (part time),however this is not definite as prospective nanny is in the process of becoming ofsted registered, and we can only commit to this if she is registered as there is no way that we could afford this option without the tax credit help. I'll let you know if we achieve it - i'd love to show that it is possible!

I am also in the process of doing this (in Scotland) but haven't got it all sorted out yet. Like the PP, I am waiting for my nanny to become registered (with a nanny agency as per the rules up here) before committing as I cna't afford it without tax credits.

As I am having to wait so long for DH's crb check I am registering as a nanny and Ofsted have confirmed that the family I will be working for can claim tax credits because I will be Ofsted Registered.

All very interesting - I have two so according to the DirectGov site I can claim up to £300/week up to 80% of my costs.

I currently pay £1000/month (get back 80%) to a nursery to look after them for 3 days a week and its always a struggle to pick them up by 6pm (latest time) as both DH and I work shifts. I also end up paying for a few hours in the morning when I don't really need them to be there, but the nursery does not do hourly billing.

Interested to know if anyone has actually got a nanny using tax credits and how they went about it!

I am in England BTW.

Also noticed that tax credits only pays a max of £300/week for 2 children or more so if you have 3 pre-schoolers and you are on a low income working probably wouldnt be a viable option if you had to pay for childcare!

I can claim up to £300/week up to 80% of my costs.

Yes and No. The max claim amount is "80% of £300".

So if your childcare costs are £300 or more, then subject to you qualifying for Childcare Element of Working Tax Credit, you can get £240 towards the cost.

See WTC2 (pdf) and WTC5 (pdf)

Also of interest is this from WTC5

If you employ someone as a registered or approved home childcare provider, for example
a nanny, you can get help for up to 80 per cent of the gross costs of employing them ?
within the limits opposite. You can include:

? the costs of any employer?s National Insurance contributions you pay

? the costs of any benefits in kind you give and

? any other costs linked with employing that person.

So you CAN include the Employers NI within your childcare costs figure, if needed.

With more than 2 children the amount of tax credit does not increase... though that's not such a problem with nannies, as a nanny is not paid per child, unlike other forms of childcare.

if a family has only 1 child then it is not really worth it as can only claim 70% of a maximum of about £110 but if there is more than 1 child then i think its £300 as long as the nanny is ofstead registered.

Ok I see now so maximum is really £240/week which might still be ok as only really need someone for 18 hours over 3 days ( if I can find anyone to do that!) at say £12/hr = £216 but now to work out all the other costs I need to factor in and work out the convenience factor!!!

You need to work 16 hours to claim Childcare Element of WTC (I think). So your journey to/from work must either be very short, or you may need a bit longer.

If 18 hours at £12 gross per hour... then £216 gross per week, plus £14 employers NI per week.
So £11,973 a year... which you could add on the cost of Nanny payroll £115 say... £12,088

£12088 / 52 is under £300... so you would get 80% of £12088 = £9670.40 leaving you to pay £2417.60
Note: this may be a simplistic calculation... you should follow calculation rules as set out in the working tax credit documents.

"the costs of any benefits in kind you give"
Does anyone know what benefits those might be?

"any other costs linked with employing that person"
Payroll - as I've already added.
Not sure what else would be permitted... can't imagine it's going to include your nanny taking children to activities.

Important Note: The salary figure used is Gross. Many nanny jobs are still advertised as NET. So some nannies expect a NET salary, rather than Gross. You would need to agree a Gross Salary, as the nanny could well have other income on other days.

Morning, I work 18 hours a week but there us a slight overlap with my husbands working hours hence the hours needed slightly reduced. We.currently claim WTC to help pay the nursery fees and our working pattern will not change sonim pretty sure we are entitled.

As you currently claim Childcare Element of WTC, I can't see that claim would change at all if you switch from a nursery to a Registered Nanny.

However a nanny is not usually cheaper than a nursery, when there are 2 children involved... though may be more convenient.
Look at all the figures. Consider what happens about nanny taking holiday - nurseries may only close a few days a year, a nanny will get 5.6 weeks of paid holiday.

£12 per hour seems a lot. I'm in London where the going rate for live-out is between £7-£10.

I pay £8 per hr plus tax & NI on top.

Just to give you an idea...

Hadn't considored holiday actually.... I get 6 weeks holiday/year and my husband gets 5.6 weeks but he cannot choose when (company allocates leave for everyone) so could I "allocate" leave for the nanny or is this bad practice?

Ok £12/hr was just a guess as I have no clue really... we are not in Cornwall.

Will do more calculations later (am at work).

Most employers have the right to insist employees take leave on certain days but for the benefit of good employee relations I think planning leave through consultation is a good idea.

You can also request a period of notice for requesting leave.

Best to get it all in the contract and agreed up front