Hiring a nanny for the first time - a few questions

[Amberbop]

I always thought I'd go for a childminder but I find myself really drawn to a young nanny that I have met, but I have some queries.
She has no formal childcare qualifications but I would like her to study for these while she is with us. I would pay of course but what is the desirable / relevant qualification and is it realistic to study and nanny full time?
Money - naive question, but do people really pay tax and NI for nannies, and if not what are the possible consequences?
Finally, kitty money. How much do people provide and what sort of things is it used for? (She will be caring for my 11 month old baby.)
Many thanks for your input!

My two pence worth, tho i am sure someone more experienced will come in a bit.....

Hmmm... depending on your hours probably no time for the girl to sleep if she needs to study too! I regularly do 11 or 12 hour days.... I would not be willing/able to then go home and crack open the books!

Yes, people do have to pay tax and NI! You can be fined £3000 if you get caught- you are liable not your nanny.

Kittty money is used for activities- toddler groups and classes etc, plus petrol/milage money.

Yes, you should pay tax and NI for a nanny. Why on Earth would you not?

Kitty money - depends what activities your baby is doing and if she has to use a bus to get there. If so, you pay it.

I used to get lots of jobs with no qualifications but experience and I would always go for someone with experience rather than qualifications.

Qualifications-wise she should do the Diploma for the children and young people's workforce. It's available via distance learning so can be done at her own pace and she will need to be observed in your home.

Tax/NI yes absolutely, plus employer's NI. You should agree a gross wage. If she wants to know what she takes home she can use an online tool to work it out. If you don't you're screwing her over as she won't get sick or maternity pay or her full pension. You're also at risk of a fine, plus backpaymemts with interest, and proceedings which could impact on you professionally if you work in certain sectors.

Kitty I budget £5/day - entry to playgroups/swimming etc, odd bits of shopping, petrol if using your car or bus/train fares, basically any expense she incurs in the course of her duties.

Kitty wise - you should be meeting all expenses relating to her and your child during the course of the week. Things like toddler groups, swimming, lunch out, mileage/bus fares as others have said. It's also ok to put a limit on it and ask the nanny to budget within this - so finding free activities (parks, walks, storytime at the library etc) and to ask her to take a packed lunch out with her for herself and the baby where practical. I only work a 3 day week and I have an annual pass to a local farm park but apart from that I spend very little. My boss put £20 into the kitty 7 weeks ago and I've only just asked her to top it up. Depending on where you live you do have to watch the mileage - it can add up quite quickly, this month it came to £90 for me but they do live in a fairly rural area. Again, it is fine to ask your nanny to limit her mileage and to ask her to ok longer journeys with you first.

Many thanks, that's really helpful. I will look further into the qualifications - she will be doing a 10 hour day with us, with a 10 minute commute and 5 weeks paid holidays so I'm hoping there might be some distance learning possibility.
We shall definitely be doing the right thing re tax, I just seem to have come across a lot of people paying cash in hand to foreign nannies and wondered what was normal.

Keep in mind that holiday would need to be minimum of 5.6 weeks (can include bank holidays). Nannies are just like any other worker in the UK, they have the same employment rights and expect to be paid in the same way.

What confuses things I feel is that you see nanny agencies advertising jobs as Net Per Week, where as employers need to know Gross Per Week for payroll purposes. I wish nanny agencies would stop Net wages, as nannies are no longer the hidden servants they might have been 100 years ago. Also you may be confused further by talk about au-pairs - who traditionally didn't earn enough for tax to be payable. However these days the difference between au-pair and nanny are getting blurred, as the immigration category of au-pair no longer exists (except for BR3).

Kitty wise, I get £20 a week every week regardless of how much we spend. Some weeks we spend more, some we spend less. That way I budget for activities.

Thanks Nannynick. The 5.6 weeks is a bit random, but if we count bank holidays that adds on an extra 8 days so we're fine there. I must confess I have been completely ignorant regarding a nanny's employment rights. I will have to pray that the prospective nanny doesn't get pregnant or seriously ill as maternity or sick pay would be a nightmare!

SMP is fully recoverable for a small employer, so no issues there.
SSP kicks in after a set period of time, on the 4th day of illness I think. Fairly usual for a nanny contract to specify sick leave as being SSP only - then in reality you can choose to pay full salary on a per occasion basis.

Best to look at things as how you would like your employer to treat you. Be fair and reasonable and there will unlikely be any problems. Ask on here for specific advise regarding anything you don't understand.

Have you started thinking about a contract/written statement? Have you decided how much salary to offer? Have you registered with HMRC as an employer? Will you be doing payroll yourself or having a nanny payroll company do it for you?
Have you check your home insurance policy to check it includes Employers Liability? (Co-op insurance is one provider who seems not to include it as standard)
How will your nanny be transporting your child - will they need to use a car, if so whose car?

We have a nanny and pay her taxes, NI etc- we do have friends who don't but my observation is that their arrangements break down more often and also it's really unfair to the nanny. Why are you so concerned about a qualification? Our nanny is unqualified but I can't really see what a qualification would add to the quality of care she gives our son- she did a first aid course and that's it. Would you pay her for time to do the course if you insist on it as part of the job? I always ask myself what I would expect of a good employer if I were the employee and I would definitely expect to do mandatory training during paid hours. Having said that don't let me dissuade you from getting a nanny, ours is fantastic, but they are an expensive option and I don't think there are really any ways to cut the cost apart from a nanny share.

If you employ someone more than a certain number of hours per work you are legally required to pay their tax and NI

I use nannytax - they are fab

Nannies also generally do still think in terms of net pay. So when u agree weekly/ monthly pay be sure to be clear if this is net or gross

Mumsnet nannies don't think in Net, nor do many I see posting on other message boards. It's those who don't get involved with online communities who think in Net, possibly due to having talked to a nanny agency - some agencies deal in Gross but alas many still don't.

All pay negotiations with a nanny should be Gross. Nanny can use a PAYE Calculator if they want to know their likely take home pay.

Just to say it's not the number of hours which is important. If you employ someone for 3 hours at £50/hour you would still need to pay tax and NI as they're over the threshold.

Ditto regardless of amount uf you are their second job (which is another reason to talk gross).

Personally I think it's great you're encouraging her to do a qualification. If she's serious about a career in childcare she should jump at the chance. Qualifications are becoming increasingly important for nannies and it's difficult to get off the ground without one.

Thanks again for all the useful contributions. We have now verbally agreed everything with the nanny and are drawing up the contract. She is such a lovely young woman, and is clearly smitten with my daughter so I am feeling much more positive about returning to work.
I am not insisting on any studying/qualifications, but I want to offer the opportunity for her to develop herself professionally. I work in a very different field but I would certainly expect that of my employer.