Afterschool nanny tax?

[goingtobefree]

We have had our nanny for the last 3 years and our youngest goes to school in September. We have asked her stay for afterschool and holiday childcare.
We can give approx 750-800 pounds per month, which approx works out to be 10 pounds per hour and annually will be around 9000 pounds. She is happy to stay but do we need to pay her tax/NI or can someone help me out how to work this out.

Do you not pay her tax and NI already?

Sorry, had to go briefly. We pay a company (Way2paye) about £200 per year and they produce all the wage slips and work out how much tax and NI we have to pay. They then gave us details of how/ when to pat HMRC every 3 months. It's all very straightforward.
Hope this helps.

Pay not pat!
Although maybe patting HMRC would be fun

Yes we do pay her tax now but she is employed for 45 hours, but it will go down to 15 hours per week plus holiday hours.

Assuming she doesnot have any other income, if your nanny earns more than the HMRC thresholds (gross) she will need to pay tax. Currently £144 per week, £623per month The NI thresholds are lower. So if she is earning £750 per month thenyes, tax and Ni is still applicable

www.hmrc.gov.uk/paye/rates-thresholds.htm

What is the difference between childcare vouchers and working tax credit element of childcare? We use child care vouchers now but which is better?

You will still have to operate PAYE, but at this level the effective rate of tax and NI will be lower because most of the pay will be below the thresholds.

Use my calculator to play with some figures. A couple of tips:

You seem to have worked out an average monthly salary taking into account different hours during holidays and term time: this is the best thing to do rather than pay her a varying amount.

Once you have worked out the amount she will be paid gross, write this amount in her contract rather than make it a net amount to save problems later.

Re. ceeveebee's post please ignore what HMRC call the PAYE threshold, I don't know why they give this any prominence because you must operate PAYE if you pay more than the National Insurance Lower Earnings Limit which is £107pw from April 2012. To be fair, they do make this clear on the information about registering for PAYE which is the link I always give on this subject.