Ad-hoc Nanny

[Josieannathe2nd]

I'm getting rather confused so posting here for advice. Previously a friend Nannied for me but only did approx 8 hours a week for 6 months so (from what I understand to be correct...) I didn't need to employ here as she didn't meet the criteria for tax or NI. I'm thinking of starting to use her as a Nanny again at the end of the year again and I want to make sure I do things properly this time.

We used to agree her hours the week before based on how much work I had, which worked fine and is likely to happen again. But now she has another job where she is self employed so I will need to employ her in case she hits the thresholds.

1. Do I need to pay holiday? If so how?
2. Do I give her a 0 hours contract? If not, what?
3. Is it possibly to do the paperwork with hard myself?!!! Given I don't pay her huge amounts the cost of an agency seems high!
4. Is she does hit NI & tax thresholds when do I find out? Or does hmrc give a tax code and then she can reclaim if she doesn't hit it?

Anything else I need to think about?

She is very lovely and the flexible arrangement suits us both well but I'm not sure how it will work out this time.

Would there be any commitment on either side? It does not sound as though you will commit to paying a certain number of hours a week/month and it sounds as though she will be able to say that she can't do any hours that you do request. Will it be long term, or just a few weeks/months?

Is her self employed work also ad-hoc childcare?

Due to the ad-hoc nature of the work, if it is what she does in her self employment, then you are another client for that business.

Though you could try to get HMRC to make a status decision regarding that. HMRC: Contact Status Team

As she is self employed in other work she does, she can provide you with a UTR (unique taxpayer reference), so if HMRC did query it in the future you could give them that to link the work back to her self employment. Keep all invoices she presents you with, plus terms of business she provides. She needs to decide the rate that is charged for the work done.

If they are an employee, then:

1. Do I need to pay holiday? If so how? 12.07% of working time I suspect. See ACAS: Holiday Pay (page 6).

2. Do I give her a 0 hours contract? If not, what? Yes, a zero hour contract I expect could be used as you are not committing to providing any work.

3. Is it possibly to do the paperwork with hard myself?!!! Given I don't pay her huge amounts the cost of an agency seems high! Yes, you can use BrightPay software (free for small employers) and use guidance from HMRC. An agency like PAYEforNannies charges around £125 a year for monthly payslips.

4. Is she does hit NI & tax thresholds when do I find out? Or does hmrc give a tax code and then she can reclaim if she doesn't hit it? HMRC would send you a coding notice. To start with you will use a specific taxcode which may be 1000L as this is her only PAYE job.

In any Month, would you be paying £481 or more? Class 1 NICs LEL 2014/15

Agree a GROSS salary.

Someone who is Employed and Self Employed completes a Self Assessment Tax Return on which they put details of their earnings under PAYE and their business profits, resulting in any tax due being paid.

It can be very tricky sometimes to know if something is employment or not. If you are likely to be needing them to commit to working a certain number of hours a week/month/year, then maybe best making them an employee. If there is no commitment and their other self employed work is also in the same sector, then would you not just be another client?