Informal child care question

[MissingMyMarbles]

I'm not sure this is the right place to post d actor, but I have a quick question you guys may be able to help with.

Recently, there was a case on the news about two police woman being charged with tax evasion as they did reciprocal child are for each other. IIRC, no money changed hands, and the charge was based on their potential saving from not having to pay child are costs. (Craziness if you ask me, but there you have it). Just what is the deal with this? I am going back to work in April and have booked a nursery place for my one day a week that is fixed. My other shift will be variable (sometimes a weekend, when DH is around). My friend has offered to have LO, as it will only be for 5 hours, once a week, perhaps 3x month. I would rather my very good friend, who I completely trust looks after LO than a CM I don't know very well but has all the right paperwork. Where do we stand with this from a tax point of view? Does anyone know?

As they are your friend they would not be charging you and you would not be paying them, would you?

Assuming you are in England, there is an exemption to the Childcare Act which permits a friend to care for a friends child subject to no reward (such as payment).
Its called somethibg like: The Childcare (exemptions from registration) Order 2010. I'm on mobile so can't do a link, someone else may be kind enough to give the link later.

It's amazing how that case has stuck in the public memory. The fact is that the case never went to court, and if it had it would likely have been thrown out. As a result of that case the then Education Minister sent a very strong letter to Ofsted telling them not to be so stupid, and changed the law so it was absolutely clear that it was never intended to apply to this kind of situation.

But if you are concerned "from a tax point of view", presumably you are thinking of paying her? You cannot look after another (unrelated) person's child under 8 for payment for more than two hours in a day unless you are registered with Ofsted. But the law that was put in place following that case defines "payment" where a friend is concerned more narrowly than is usual in English law as "money or money's worth". So you can give her any goods, or pay for any service she recieves - you just can't give her money or store vouchers that she can use to pay for things instead of money.

However from a tax point of view this is still income, and she should declare it on her tax return (as income from Self Employment if this is her business, or Other Income if it is not).

It is legal if the woman comes to your house and is your nanny. You would have to pay her legally as your employee though looking into any responsibilities for tax, NI etc.

Thanks for the replies
It would be such an informal arrangement that I would likely not be paying anything, because it might not even be a regular thing. I might gift her the odd bottle of wine for her kindness. I asked about tax because of that case and the fact that it would be covering childcare while we are at work, as opposed to an evening out.
What we are really hoping for is that DH will be able to be sufficiently flexible, as he is based at home anyway, that my friend will be the last man standing, if a wheel were to come off.