CM v nanny question (pay related).

[KellyKettle]

We had a CM for DD1 a couple of years ago and just paid her via childcare vouchers.

We found someone for when I return from mat leave who has offered to mind my two children in my home which I guess makes her a nanny rather than a CM (she isn't yet registered).

Does this change how we pay her? Will she still do her own tax return etc?

yes, you will be employing her and you will be responsible for the tax and NI although there are places (like nannytax) who can organise that for you. A nanny will be entitled to the same rights as all employees (sick pay, holiday pay etc)

She can become ofsted registered and then she too will be able to accept vouchers too

She would be a nanny (CMs are registered to use their own homes) and she would be your employee, so you would have to offer a gross wage and pay tax and ni from her wages. Don't go down the 'Nanny self employed' route as it'll be you who gets screwed over by that should the tax office discover what is happening.

www.mranchovy.com/calc/ is useful to give you an idea of how much you will be paying As Employers National Insurance on top of your nannies Gross salary.

www.hmrc.gov.uk/PAYE/ has information about operating PAYE, registering as an employer.

What country are you in? Childcare vouchers can be used with nannies but how that actually works varies depending on which country you live in.

Can I ask why can nannies not be self-employed? Ours is, she is part time and has another self-employed income other than childcare.

Should add this is a situation we sort of stumbled into, she joined us in more of a short-term doula role, but she's awesome, so we'd like her to stay with us part time if possible, we're not intentionally breaking any rules!

She will not do her own tax return because she will be your employee.

You will be responsible for paying her tax, employees NI contributions and employers NI contributions - as well as issuing her with payslips (I would recommend Zest Payroll who can do this for you).

You will also have employer responsibilities - you can find out more here.

With regards to a nanny being self-employed, you might like to look here for some more guidance. In the eyes of the HMRC, it is unlikely your nanny could be self-employed which leaves you open to being prosecuted.

PeelingmyselfofftheCeiling, contact the HMRC Employment Status Team for a ruling in your situation. The decision should hinge on whether she is providing the same service to you on similar terms as her other clients.

Unfortunately HMRC's guidance on employment status is not very helpful where childcare is concerned - most of the criteria that HMRC use don't apply in the way they are intended to. However in court HMRC's criteria don't apply, and their senior status officers know this so will generally give a more considered decision in an individual case.

Eek! It suddenly sound very expensive, might not be able to afford it. I don't mind paying holidays etc, we'd do that anyway. I just really wanted my DDs to be looked after by someone they know. I don't drive so I'd never get them to her house and then me to work.

No CM locally.

Will look into it a bit further. Thanks for the links. I'll look now.

Don't give up yet, it might not be as much as you think... Payroll companies do all the 'hard stuff' for you' and can charge around £150 - £200 per year ..

Hey MrA I liked the link to working out what we'd pay. I'd only need 25 hours which actually doesn't actually seem as bad I thought.

What about reimbursing petrol costs? I'd need a contract then I guess.

Yes you'll need a contract - most of the payroll agencies provide one.

For journeys in her car while working (not from her home to work) you can pay up to 45p per mile.

www.ofsted.gov.uk/resources/factsheet-childcare-requirements-for-childcare-register-childminders-and-home-childcarers

Home Child Carers are self employed but provide care in the child's home like a nanny. This was launched by Ofsted some years ago but has never been a very popular method. But if you found someone who was willing to care for your child at your house it could work. I've been childminding for 21 years and have considered doing this when I decide to stop childminding.

Home Child Carers are self employed are they? I didn't know that a registration type determines employment status.

As a Home Child Carer myself, I am NOT self employed whilst nannying for a family for 40 hours a week.

Ofsted have nothing to do with tax status.

'Home childcarers' in the context of the document you linked to simply means care in a domestic setting which is not subject to compulsory registration (i.e. nannies, 8+ childminders etc.)