Very pt nanny - pay less than tax threshold

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Hi

We are looking at employing an afterschool nanny for about 9 hrs a week. We would propose that nanny gets c£10 p/h take-home (although we would agree a gross sum, likely £12 p/h, and this is where I get a bit muddled). Clearly, if they are working for someone else we will need to register regardless.

1. 9 hrs a week at £12 p/h is less than the £109 a week Lower Earning Limit treshold for even needing to register with HMRC. Does that mean that we need not register?

1. If (s)he then did a couple of extra hours one week, that would put them over the Lower Earning Limit threshold, and for their benefit, we should register so they start to accrue pension rights etc even though tax/NI will still not be payable. Given this, should we just register anyway?

1. We may well get someone who is a student or retired and so not working, in which case do we say £10 gross as there will be no tax to pay? Whereas, if they have another employer, we say £12 gross?

Feeling very stupid about all of this!

Thanks

If they ever go over the £109 then you need to register as an employer.
If they have any other income then you need to register as an employer.
If they are getting payments from a pension then that is income, so you need to register.

If you need to do PAYE will depend on the circumstances if you are always paying below PAYE threshold.

Best thing to do is to talk to a payroll company, they will often give you free advice.

Decide on the gross wage and offer salary as gross. Tax situation can change during their employment with you, such as them getting other work, getting pension payment, so do not talk net wage at all.

Thanks NannyNick. Agreed that gross is definitely the way to document it.

£10 gross would give you a little room for overtime, if it was the persons only income.

See HMRC guidance for what documents you need if they do not give you a P45 from a previous job.

Find out early on if they have a P45, another job or pension income as it can take a while to register. Try to agree monthly pay so there are less payslips to create.