Complex nanny share tax question

[Taranta]

well, probably not to those who understand such things, so looking for a Mr Anchovy type answer I think: we have a nanny three days a week, £10 ph net, works 10 hrs a day. We may share our nanny but only on one day of these three days, when the nanny's going rate would be £12.50. How do we split the tax and NI between us? I am bamboozled...

dont know about the nanny share bit

but you should discuss gross,esp as only a 3 day job and your nanny may now or one day in the future get another two day job and this will means huge tax implications on you if you talk nett :)

Ah, thanks blondes - we do use gross on her contract, I was keen to make sure of that!

work out what the gross would be that day - assuming £15ish an hour so £150 for the gross salary and tbh prob be easier if the mum gives you £75 cash and you pay the nanny

some may say just pay the nanny the extra £25 for the day and not to worry about the tax - but obv blondes wouldnt advise that as illegal

You need to split the nanny's tax code between you, use nannytax or someone like that, they'll take care of it all for you.

'tbh prob be easier if the mum gives you £75 cash and you pay the nanny'

I can't remember why, but I'm sure I've seen MrA post about why this is not a good idea! Something to do with if the share goes wrong or the nanny's tax code changes or something.

One solution would be for you and the other family to jointly employ the nanny for one day a week under a separate contract, registered separately as joint employers (it might be easiest if the other family did this).

Family 1 could then employ for 2 days a week at a reduced rate of £11.10 per hour (I assume the exsting rate is £12.33ph). She would take home £200 per week from this job.

Family 1 and Family 2 would jointly employ for 1 day a week at £15.81ph. She would take home £100 from this job. The total cost including Employer's NI would be about £160pw; you might want to make adjustments depending on whose house is being used etc and then split the cost equally.

If you embrace the concept that someone is paid a gross wage then the question "how do we split the tax and NI" becomes meaningless (except for Employer's NI) because you don't pay her tax and NI - she does.

Hmm, that leaves the other family paying £80 for a half share in a nanny for a day which is a bit steep - see the problems you run into when you talk net?

An alternative:

Family 1 could then employ for 2 days a week at the existing rate of £12.33 per hour. She would take home £213 per week from this job.

Family 1 and Family 2 would jointly employ for 1 day a week at £14.03ph. She would take home £112 from this job. The total cost including Employer's NI would be about £141pw; you might want to make adjustments depending on whose house is being used etc and then split the cost equally.

Note that in May the increase in thresholds would result in additional net pay of about £9pw in the first job.

I would certainly get the other family to give you the cash, you can always disband the share if it gets difficult - call it an informal ad hoc share if you like!

I used to do a nanny share and I was employed by both families to do 5 days so both paid the same. I don't know the arrangements for tax though, sorry.

I'dignore Karoleann's advice though.

There are two reasons for making a formal contract between the nanny and Family 2:

1. It is cheaper - each employment benefits separately from the NI primary and secondary thresholds which saves up to £17.50 a week for the employee and up to £19.70 a week for the employer.

1. In the absence of any written agreement, with Family 2 paying Family 1 a sum of money it may be difficult to argue that this sum is not payment for childcare services provided by Family 1. Family 1 is almost certainly not insured to provide childcare services which could cause big problems if a child of Family 2 had an accident in the house of Family 1 or while in the care of the nanny. Furthermore Family 1 is almost certainly not insured to employ someone to provide childcare services to another family which could cause big problems if the nanny had an accident at the house of Family 2 or in the course of caring for a child of Family 2.