Live out nanny turning into live in PLUS bringing baby to work

[celestialsquirrels]

Hi. My lovely nanny/housekeeper of 5 years rents with her husband 30mins drive away. She is about to go on maternity leave and wants to come back plus baby (although I have told her to have it first and then decide!). She has thought about moving to our area but finds rents too expensive. She is in tiny 1 bed flat.

A lovely large 2 bed flat with a garden has come on the market 5 mins walk from us. I'm thinking about buying it as a staff flat. If she wants to come back to work for me after the baby she could have it if she wants - lots more room for her, husband and baby and an area they like and close to us but not on top of us.

Assuming she is earning £350pw net at the moment, what discount would I make to her salary for a) accommodation included and b) bringing baby to work? She is paying about £900pcm rent where she is...

Many thAnks!!

Wow you're a very generous employer. I can see why she's been with you for five years and wants to come back.

I would say a 10-25% paycut is fair for bringing the baby with her, depending on how much you think it will impact her ability to so her job. If she carries on as normal, buy with baby in tow then 10% is fair, if she needs to reduce her workload because of the baby then a bigger reduction.

I'm not sure about the rent. She's currently paying about 225 in rent. If you take that and 20% off of her net wage ahe ends up with 55 a week. That doesn't seem much. Maybe you could offer her the flat for 900pcm, but keep her wage the same (minus the 10-25%). I know it ends up the same, but it just seems better!

Talk to an accountant before buying, providing separate accommodation is I expect a benefit in kind, not the same as providing a room in your home.

Lookup accommodation offset for what an employer can deduct for providing staff accommodation.

Bringing own child could see a reduction in salary but what percentage someone would accept is hard to know. 20-40% perhaps.

You sound lovely but I would only rent her the flat at that price if she was still working for me .

Yes, separate accommodation is a benefit in kind which means your nanny will have to pay tax on it, making it slightly less of an appealing option for her.
I think the minimum wage offset for providing accommodation is 4.91 a day. How many hours a week is your nanny working?

If you can afford it..

Rent her the flat for £600 a month, make her a tenant... and keep her wages the same!

Think that's what I would do!

I don't really want to make her a tenant because I want to be sure that if she stops working and I need to hire someone else, I will have the flat available. If she is a tenant and doesn't leave it will take me quite some time to get her out, especially if she pays the rent. If she is on licence I can get her out much faster.
Mind you I don't know why I'm worried about that as we have an excellent relationship.
Thanks very much everyone, lots to think about.

Why do you need a staff flat? Unless you are seriously thinking of trying to make money for long term use I wouldn't bother - what rent were you thinking of charging

If you do buy then keep flat and nanny separate contracts

She can obv with her hubby afford £900 - which tbh sounds a huge amount for a 1 bed flat - obv an exp area

Discount to bring her child 10/20 % is average. 40% too low

Would you need to consider things like Capital Gains Tax as it would not be your place of residence?

Tied Housing, is that what it's called when an employer provides a employee with a house? Service occupancy, expect you will need to be careful about how agreement is worded to not make it a tennancy.

Lovely of you to offer but do look at what it will cost you when you eventually sell it, get financial advice.

Would you be paying all the bills on the flat? How about toilet roll/cleaning products/vacumn etc. What about food?

I went from being a live in (separate flat, all above included) to a live out.

We swapped to a whole new contract with the change in expectations and hours. My pay rose by about 7%.

Blondes - we pay £1850 a month for a one bed flat. £900 seems like a bargain!

I would probably pay her £300 a week instead of £350 then. Much less and it begins to become not worth it to work. That is already a fairly low wage for live out if full time.

Or if husband moves in also could you propose that you pay £350 wage as usual and flat, but if husband helps as a kind of gardener/ odd job help or similar to you also. So you get extra help from them in exchange for flat?

So a few options to suggest

My old bosses gave me the same salary when I went back to work and upgraded the staff flat to a two bedroom. But I was on my own so if I'd had a partner I'd have expected to contribute. I also got all bills paid so maybe make them pay those and a small deduction in wages?

Could this become complicated if she made roots in your area (eg sent her DC to local school) - and then she left your employment - so you would expect her to move out immediately?

Omfg artandco where do you live?

I paid about £800 for a 3 bed house tho was mortgage - next door rent theirs out for £1400 a month so coverin mortgage and making over £500 a month

Paying almost £1900 for a one bed flat seems insane

'Blondes faints'

Central london

My industry has historically always provide housing to it's key staff. However, HMRC have recently tightened up considerably and only accommodation physically at one of our premises is excluded from tax as benefit in kind.
If it is away from the premise it is tax in accordance with the employees tax code at what HMRC would consider the market rent to be. So the market rent for your flat would be £1800 per month and she is a 20% tax payer her additional tax bill will be £4320.

I dont see how this will be attractive to her.
She wont have security, if she loses her job she will be homeless with a baby.
If she rents privately and she is on low income she might get housing benefit (i dont know how much you need to earn in order to get hb). Why would she want your flat and a very reduced wage then?

Not sure if it has already been mentioned but what about buying the flat and then charging her the same rent she is already paying and maybe pay a little bit less in salary if she is bringing her child to work.

Whatever you think you want to do, I would get some advice from a housing lawyer.

Decent tied-accommodation only works where it is provided for the better performance of the employees duties. There are lots of cases on whether or not something that has been expressed to be tied accommodation is indeed genuinely tied (whatever the contract says) or is in fact held under and assured short hold tenancy. So the groundsman's cottage in the estate he works is probably is, as is the school caretaker, the licensee of a pub, but someone who lives down the road with exclusive occupation in accommodation that quite frankly could be private rented from someone else and is not required for the better performance of the job is probably a tenant, whatever you say!

HTH

Impossible to be a tenant if I'm not charging rent boomboom - if I was to charge rent then I don't think there is any doubt she would be a tenant for the reasons you give.

Yes I think my bright idea may be turning out to be not quite so bright. Tax implications are pretty steep if info anything other than an arms length tenancy at market rent and that negates the point of it really. Ah well! Thank you for your v helpful thoughts!

It is possible to become a tenant even if you are not charging rent you would need to have an employment contract that specifically states that a tenancy is not being created by providing accommodation. Tax and law wise providing accommodation is fraught with difficulties.