Gross or net pay agreement?

[chandellina]

I am about to renew our nanny's contract and she has always preferred a net pay agreement. This has actually been to my advantage for the past couple of years and will be continuing into 2013/14 tax year because I have gotten the benefit of the rise in personal tax allowance. My payroll company says they are urging for gross pay agremeents though, and that PAYE rules will require one from next year. Anyone have any knowledge/thoughts on this? Many thanks.

Not sure what they mean by "payroll rules will require them"; there is a new system which looks set to start on schedule in April 2013 but it will be perfectly possible to continue to calculate back from a net salary.

When you say it has worked out well for you, haven't you given any pay rises in the past couple of years? How much were these? How much do you think they would have been if pay was gross? What would you do if HMRC discovered your nanny had underpaid tax in her last job and decided to change her tax code so that keeping her net pay the same cost you an extra £200 a month?

Net pay is right for jobs where you are required to work in different places in the world with different tax regimes as your employer demands and has no other place in the 21st century.

I understand your points but after three years on a split tax code for a share I'm not expecting any legacy tax issues. If something so serious emerged, we would have to end the employment.

We have given a pay rise and the rise in tax allowance helped cover it. I personally wouldn't feel I'd gotten a raise just because the tax situation had changed. So I am still lea

Sorry. Still leaning toward a net rate, as she prefers it anyway.