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Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

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Original poster

Nanny - paying tax and NI, can anyone advise?

18 replies

Pollyanna · 28/04/2006 12:01

My au pair has been offered a job as a nanny. The employer doesn't want to pay tax or NI. can anyone tell me what my au pair is obliged to pay (presumably her NICs?) and what the consequences would be if she got found out. And also, what benefits does she miss out on if tax and NICs aren't paid by her employer.

(I tried doing an archive search on this, but for some reason it wouldn't work).

Thanks

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Bugsy2 · 28/04/2006 12:15

The employer is responsible for paying the tax & NI because they are her employer. I don't know what the consequences would be for your AuPair, but the employers, if caught, would have to cough up for all the unpaid NI & tax.

thewomanwhothoughtshewasahat · 28/04/2006 12:28

It's totally illegal of the employers to suggest this. The employer has to deduct tax and ni from the nanny's gross salary and pay it to the Inland Revenue

from one of the nanny agency websites

Register with the Inland Revenue
If you employ a nanny in the UK and you pay her more than £91 per week (tax year 2004/2005) you are required by law to register as an employer with the Inland Revenue and operate a PAYE scheme.

These obligations also apply:

If your nanny earns less than £79 per week in your employment but more than £91 in total (e.g. if she has two part-time jobs)
In short-term employment (i.e. a week or longer)
To any employment taking place in the UK - irrespective of the country of origin of the nanny or employer.
Failure to register as an employer if you are paying your nanny above the weekly threshold is an offence, which can potentially lead to heavy penalties

Bink · 28/04/2006 12:39

Pollyanna, the Nannytax website has lots of good detail on this - especially on what she'd lose out on if being paid cash in hand.

See \link{http://www.nannytax.co.uk/nannies/advice/responsibilities.html\here}.

I would ask her to think very carefully about taking the job. If it were me I'd tell her she shouldn't - because even if she can persuade them to change their minds on tax/NI, I'd take it as a warning about what they'll be like as employers generally.

Original poster

Pollyanna · 28/04/2006 14:26

thanks for that link Bink - i have shown it to my au pair. She is in a real dilemma about the job, she has been looking for about 4 months now and this is the only offer she has got (sounds very cushy as well - just a baby to look after). The employer is adamant she won't pay tax, and has said the job will go to someone else if she insists on tax.

OP posts:

MrsBigD · 28/04/2006 14:30

Sounds like that woman is trying to skimp where she can.

When I looked into childcare I VERY briefly considered employing a nanny cash in hand, but with my luck I'd get caught

When I was looking I found that a lot of Australians/Kiwi's offered to work for cash in hand, simply because they weren't worried about paying NI/pension fund for the 2 years they are over here.

thewomanwhothoughtshewasahat · 28/04/2006 18:14

lots of alarm bells ringing there. she wants a nanny on the cheap - I assume your au pair is not qualified, which by no means rules her out of doing a nanny job (especially one with older kids) but does make her cheaper; and she's perfetly happy to break the law to cut costs. How hard has your au pair been looking? has she advertised? Would this family give her a contract? paid holiday? is it live in - in which case have they been clear about baby-sitting? so many other questions arise. My nanny used to be an au pair - this is her first nanny job (my kids are older though) - so it is possible to find someone who'll do it all above board.

Coolmama · 29/04/2006 18:18

Get your au pair to insist on a work contract - that is, if she desperately wants the job - if I were you, I would tell your au pair to run like hell and wait for a job offer that is above board. I have a feeling that this woman will not be happy about a contract and your au pair will have to then accept the job on the understanding that there is nothing certain about her renumeration, vacation time, days off and conduct while working, no fall back if she is fired for no discernible cause and certainly no job security. Not sounding so fabulous to me. Aside from the fact that it's all illegal anyway and if she is caught, her name will be forever in the system for tax fraud and she will be watched all the time, no matter what her next job is.

secur · 29/04/2006 18:24

I have to say it sounds bad to me, I can't imagine she can have any sort of insurance cover if she in cash in hand (ie third party cover in the home, legal cover etc) also I can't believe she can have a proper contract on that basis.

She could opt for going there self employed but then she would have to make sure her wages cover the tax and NICs she would have to pay out of her own pocket.

jura · 30/04/2006 09:00

This reply has been deleted

Message withdrawn at poster's request.

Original poster

Pollyanna · 30/04/2006 18:51

Thanks everyone. She decided to turn down the job offer. She thought it sounded dodgy in other ways too - the woman offered it to her without taking up her references and wasn't going to phone me, which sounds really odd given that she wanted her to look after her baby. She thought perhaps she just wanted to use her as a cleaner.

She isn't qualified, but has worked for me for over a year, and before me for her previous employer for 2 years, and is pretty good really, so she is looking for her first nanny job. they are very hard to come by at the moment.

OP posts:

thewomanwhothoughtshewasahat · 30/04/2006 19:11

sounds like a strange woman. No disrespect to your au pair but leabing a baby with an unqualified carrer without taking up references is just lunacy! has your au pair tried gumtree.com, simplychildcare, nannyjob? My nanny had worked as a kind of au pair (not technically an au pair as she didn't need an au pair visa iyswim) for 2 years, doing quite a lot of sole care, as she worked for a family with 4 kids, so she would often take 2 out for the day. or the mum would etc. She had a very good reference and now that mine are full time and p-t school i was more than happy to take her on. Can you may be help her do a cv and/or jopb adverts - I'm sure she could find something - especially if she's willing to be a bit flexible on hours. I thin she's made the right decision to turn this job down.

Uwila · 01/05/2006 09:41

I agree that this girl should be able to find a nanny position -- especially if she is willing to relocate and is looking for a live-in position. Nannies are very expensive and there is definately a market of people who are looking to make it affordable. So, if she is willing to work for a bit less than the going rate, there are people out there who will hire her.

My current nanny was an au pair before coming to work for us. Before being an au pair she worked in a day nursery in Canada and did some sort of childcare qualification before that. Whilst she has never been a nanny before, we are generally happy with her.

And I NEVER would have hired her without speaking to her references.

NannyL · 02/05/2006 18:23

the onus is on employer to pay all taxes etc...

if it is found out the bill will be sent to employer with a £3000 fine on top.

Its ILLEGAL and its the EMPLOYER who is breaking the law!

Uwila · 02/05/2006 20:13

I thought the onus was on the employer to extract the tax and send it to the IR. My guess is the IR will go after both and see who they can get to pay. Then, of course, the employer also pays employer taxes. And, yes, the fine belongs to the employer.

jules1972 · 04/08/2006 17:23

The employer is obliged to pay tax and n.i. If its not paid, the tax man will go after the EMPOYER not the EMPLOYEE like any other job.

Due to a change in law last year, nannies are no longer allowed to be self employed.

If they wont pay it, its there problem. The nanny sould just enjoy her money - she has no worries!

blueyes · 12/08/2006 11:04

Nannies can not be self employed, which is what this woman would have been suggesting if she was refusing to pay tax and NI. No doubt she will find someone desperate enough for a job to say yes to her, but it is illegal and they would both be taking a huge risk

Nettee · 13/08/2006 13:21

my nanny has had a about 5 jobs before mine and I am the first to pay tax. She says that previous employers said they would hire someone else if she insisted. She was advised by "the powers that be" not to make a fuss about it because if the employers said that she was self employed then she would be the one who would have to pay up.

It is shocking as she has lost pension contributions for years and has been unable to have credit as she could not prove a regular income.

Judy1234 · 13/08/2006 15:59

If found out the au pair would have received income not taxed, so later could be required to pay the tax and NI on that unless she was told she was being paid a net sum (which she wasn't) ,. Also an offence but a very common one (in 21 years ago with baby number 1 I often thought I was the only person I knew who actually paid the nanny's tax)

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