Self-employed nanny

[Tapestry12]

I have spoken to HMRC and they weren't particularly helpful.
My query is:

I want to stay in job and want to make employing me still attractive financially to family. They still need Childcare but less hours. Have until now been working 10 hours every week on same day, PAYE. £10 ph gross

So want to suggest to this 3rd family, that I work possibly 6.5 hours a week, on same day, could be less could be more. Depending on needs. At 13ph gross. Either me self-employed or PAYE. They pay me 6.5 hours every week and we do time sheet to keep track of hours worked. So that when they need me more they can see if I owe them hours.

Is this sensible or totally daft?

HMRC said they are only interested in receiving tax. No help what so ever.

If you work the same hours every week for the same people you are employed and HMRC will penalise your boss if they catch you pretending to be self employed. You can only be self employed if you can accept or refuse hours as you choose. No paid holiday. No paid sick leave. No paid maternity leave. No paid notice. It is very unlikely to be in your best interests to go self employed.

I am not sure, but I read thread so didn't want to run off without commenting.

From my limited knowledge of nannies and being SE, I was under the impression that's it's not very straightforward and so majority of nannies are PAYE. I'm pretty certain I have read posts on here about it before, so someone will come along who is more helpful!

Thanks for responding so quickly.
Ok, so self-employed not a good idea.

So what about the rest but as PAYE.

Why do you want to have the hassle of doing a tax return, keeping accounts, producing invoices?

How many employed jobs do you have? How many clients would you have if doing self employed work?

If you do evening babysitting for people you do not already work for , then you may have several clients, so adding another one may not be too bad. As long as the 6.5 hours per week is not contacted, and it varies day, then overall it may not be employment.

Did you speak with status team at HMRC or a different helpline?

Not quite sure what you are trying to do. 3rd family? Can you explain more about what you are proposing?

You'd still have to look into NI contributions if you went s/e.

You'd have to look into which employer would take your tax code I think?

You can do the PAYE option I think....did HMRC not mention this at all when they said all they want is owed funds?

You can have numerous jobs under PAYE. Agree a gross salary for each.

You can have a zero hour contract, can be useful if parents don't want to commit to set hours each week, though do make sure you agree a high salary for being so flexible!

It depends on whether your employers are happy to pay you £13p/h as opposed to £10p/h.

Why are they reducing your hours? Are you in a position to look elsewhere, that offers more?

If employed and self employed, as long as not earning much (think less than 4,500) then you can get a NI exemption. Can't remember the details off hand, so look it up if that is a likely situation.

Cindy - that's correct but not advisable as NI exemption means no qualification for maternity allowance, state pension etc.

Family want to reduce hours because youngest going to be at preschool for 4 hours.

I still need to work and earn a living. Finding specific one day job is not easy.

I work the other days of the week. Home Counties high cost of living.

By having higher rate I am still taking a pay cut.

It's a toughy, my first inclination is to suggest looking for another position, but I understand one day a week is going to be very hard to find!

All you can do is speak to parents, be honest, I'm sure they will understand that you need to earn a wage, and with child at nursery, you will be at a loss. Perhaps they will be able to suggest a friend who may need a few hours childcare on that day?

What are your ratios like on other days? Could you consider taking on another family, and having a nanny share situation?

Unfortunately not possible to do nanny share.

One day nanny job employers have asked me what nanny duties I could do during spare hours. I have said there is loads that I can do, laundry, ironing, children's bedrooms, kitchen, and playroom clean and tidy, batch cooking, but not general household cleaning. Cleaners get paid considerably more than me!

Would you and they be happy to pay as normal for those hours? If so that's a good solution!

I am quite happy to continue with 10 hours a day, it is employer who wants to cut hours.

Then you either need to accept less hours, give notice or negotiate something in between. Will entirely depend how much you want the job and how much they want you as to where you meet in the middle. Remember that one day nannies are not easy to find so in a way you have the upper hand, particularly if you are willing to do other stuff during the day.

It's actually more advantageous to go self employed. We only ever have SE nannies but then we are 10 hours per week. With SE it's quite straightforward. Declare yourself self employed, invoice family at end of the month. You'll pay considerably less in NI contributions. If you use this as your only job you can do your tax return yourself without an accountant.

It's actually more advantageous to go self employed.

for the employer! The nanny gets no paid leave and no protection and no NI contributions from that job.

The more I think about it, the more accepting I am.
The children are older, the parents no longer need as much child care.
Therefore reduced hours. However, during the morning I am unlikely to find employment for 3.5 - 4 hours. Is it reasonable to ask for rate increase from £10 to £13?

So they currently employ you for 10 hours a week and do payroll.
They are proposing less hours which is reasonable from their side but you need to consider a few things:

• Does it mean later start to your day, or are they wanting you to come in the morning for a bit, then go home, then come back and do a few more hours? The latter is messy and adds to your cost of getting to/from work.

• If pre-school is closed, child ill, anything like that - will the parents do the pickup, care for child or are they expecting you to drop whatever you are doing and collect the child?

• Pre-school may be term-time only, what happens the rest of the year?

With regard to self employment, I can't see how changing the hours would make a change to employment status. The parents are still the ones in charge, telling you when to arrive, what to do.

Currently £10 gross, 10 hours = £100 per week. At that amount there is already NO Employers National Insurance. There is also no Employees NI. So any reduction in hours is a drop of just the amount paid to you. So you being an employee is not adding any cost to them other than payroll admin (which they could do themselves). You going self employed would not save you any NI as you are not currently paying any in this employment.

Do you have one or more other jobs which are also done under PAYE and those employers are not connected in any way with this 3rd employer?

I would keep things as they are. If they need a nanny then they need a nanny. If they want to use pre-school then they may need to rethink that. Even if they used a childminder they would often be charged for the time child was at pre-school.

Lets say you currently do 8am to 6pm (10 hours)

They now want Midday to 6pm (6 hours)

So if you wanted to agree to that, then yes I would renegotiate the salary.

So from £100 (£10x10), to £78 (£13*6).

It's a drop in income but gives you the morning off to do whatever you like (sleep, shopping, gym, get the car serviced).

Always, I am self employed as well. You get paid more per hour so it all equals out in terms of holiday time taken. Who cares about NI contribution? I pay about £10/month versus hundreds if employed!

OP, do some proper research about benefits of SE.

Also OP do discuss what would happen if child was sick. Would you still get paid? What about when family go on holiday?

We paid full pay when we were away or sick but nanny did not get paid if she was sick or on holiday.

Nannynick
My other two nanny jobs are PAYE. Families know each other.
Hours family want are 7.45 am to 9.15am then 1pm til 6pm
Getting to and from work isn't problem as we all live in same village.

The potential flaw in this is what if child is sick? Will parents cover your hours? It would be unreasonable to expect you to do it, especially if you arrange to do other things in that time.

I pay about £10/month versus hundreds if employed!

But as an employee, they currently pay Zero Class 1 National Insurance.

They also don't pay any Class 2 National Insurance or Class 4 National Insurance (as those apply for Self Employed).

So I feel it does matter. Class 2 National Insurance may not be very much money and they could probably get an SSE (CF10 - Self Employed People with Small Earnings) but why show they go down the route of doing accounts, creating invoices, filling in HMRC forms, when they are doing perfectly fine now as an Employee. Where is the advantage to the Nanny?