Au Pair and National Insurance

[ChocolateBiscuitCake]

Hi there,

This seems such a grey area and I am yet to receive any concrete answers so wondered if anyone here may have experience of this.

We live rurally and have a sweet au pair couple who help 25 hours a week each - childcare, gardening, housework, driving etc. They have a pretty nice life - cottage, board, lodgings, car and lots of free time...

Since arriving in September, they have been fixated on getting their NI number and rejected all offers from friends for extra hours for extra cash. They have said that they don't want to go back to CZ Republic so whilst they have said they will work as an au pair for a year, I am under no illusion that they want to further their potential - good on them.

I don't mind being their starting platform or them having a second job (in theory), but don't expect any second job to impact on the hours they can help me with in the holidays, for example. Furthermore, I am mostly concerned as to the payroll aspect of them having a second job.

As I understand it, they are au pairs and, if earning under £109 a week (which they each are) they do not pay tax, and I am NOT am employer.

But the murky waters start when they get a second job and suddenly they are employed and they are then earning over £109 a week (albeit in two different jobs. Having spoken to a payroll company, they state that if the au pair starts to split personal allowances then I will need to have them on a payroll and the is is going to cost me £235 per au-pair, per year. This in itself is an issue!

I need to go by the book on this one as DH works in a high profile role and under no circumstances do I want our au pairs (who are currently totally legit!), to jeopardise his job.

Is there anyone out there who has had experience of au-pairs, paid second jobs and payroll please (i can barely do my times tables, so would need a payroll company to sort taxes etc rather than do it myself…plus, I feel that we agreed terms on them being au pairs so should not have to do their payroll!).

Thanks so much in advance.

I am sure since the hrmc changed the way they are told about wages paid, they will no longer split tax codes (going from nannies who did split code between employers and now can't) so as I understand it, as long as you register as an employer with hrmc and you are their first and main employer you get all their tax allowance or as much of it as you need over a year and you carry on as you are not needing to pay ni or tax etc on top of the amount you give them.

Speak to the hrmc not a payroll company as I have found the payroll companies not the best in the last month or so of dealing with them, you need to speak to the hrmc themselves.

Thanks Eeyore.

So does it cost anything to register as the primary employer with HRMC?

Will I then need to produce weekly payslips?

Will I need to produce any other paperwork I haven't thought of (this is so out of my realms of knowledge and comfort!).

Nannytax spoke about splitting the personal allowances when we chatted half an hour ago - I would assume they are up to date, but will definitely follow up.

I am frustrated that this has already taken up so much of my time…au-pairs are meant to be simple…grrrr (pregnant and hormonal - sorry!).

No experience of au pairs but HMRC do definitely still split tax codes between employers.

Sure registering with the hrmc is free and even if they do still spilt tax codes you are her first and main employer so you would get most if not all of it so that would cover all you pay them during the year.

Not sure about providing payslips etc, that is a possibility. There are other payroll company's you can call/use and they do vary in cost so worth checking out a couple of others too. Nanny wage is one I am sure and think PAYEfornannies is another. So see if they is a local accountant who would be happy to run your payroll for a small fee each year. Think most nanny ones are around £100 a year up.

To be honest, you have only known ths couple for 2 months. An AP as you say, is supposed to make life simpler. If you jump through hoops, what is to stop them moving on to a ft job elsewhere.

I would stick with what you are doing, and if you are concerned that there is any potential for concern on tax front, I would give notice.

Thanks John - you have summed up my sentiments. They came and joined our family with the agreement of being au pairs - hassle free, extra pair of hands and we have gone well over and above in terms of generosity (extra money for fuel, generous food allowance, access to our home in London with days off to explore, train fares). Like I said, lots of friends have offered extra cash in hand jobs, so there is no need for them to say there is no extra work around.

Suddenly, having to go above and beyond is becoming a hassle and has a financial implication to us as well as a practical one (e.g. loss of flexibility in working hours in the holiday).

They are dispensable (as much as I like them - him actually more than her).

They can't accept cash in hand it's not legal and sounds like they don't want to risk getting caught so good on them.

However, if they wanted extra cash they could become self employed and set charges for work. Then at end of your assessment they put earnings in and they will likely be under the limit to pay tax. I think all people who have people living and working in their home should register with the HRMC anyway maybe this will stop people abusing au pairs and nannies with low wages and high expectations.

You could always write in your contract that the au pairs aren't allowed to split their personal allowance this way you don't need tondo anything except register as an employer. It does mean if they get another job alongside yours then their net pay may be lower than they are expecting. However it sounds like this won't worm either as it sounds like you need the flexibility they offer without working for anyone else.

Thanks for taking the time to respond mrswishy.

Does it cost anything to register with hmrc and do I then need to do payslips and tax return stuff? Because this is out of my realm of knowledge and why I would use a payroll company (which will cost me £235 per au pair).

Not sure that it is fair to say that they are on a low wage with high expectations though? As detailed above, they have significant and generous board, lodgings and insured car (their own private cottage with bills, wifi, tv etc included!) for 25 hours help a week!

Babysitting is illegal as cash in hand??? Hmrc are missing a trick!

In the term time, I am happy for them to have a second job. The whole point of an au pair for us, is the flexibility of extra help (and willingness to pay for extra hours) during the holidays. I don't think that is unreasonable when they accepted the job on those terms and never mentioned wanting second jobs to supplement their pocket money at interview.

It shouldn't cost to register with the HRMC and they are very helpful. They also can give advice on play slips etc might be worth calling them to see how easy it is. The payroll company price you've quoted seems quite high so might be best to look around at some of the companies others have mentioned.

Sorry, I wasn't specifically meaning your position as it sounds like you are doing a good deal, I'm talking about the realms of other employers who want cheap childcare. I really think there needs to be more monitoring of working in homes as there are some unscrupulous employers about.

ALL earnings should be declared to the HRMC, it's law and for the better benefit of the country. Obviously not everyone is honest but the HRMC can fine someone caught evading paying taxes.

It this is their first year in the UK they may not have realised how expensive things are, maybe they want to save more,they may be bored only working 25 hours per week or any number of other reasons. It's not unreasonable for you do come to an agreement with when they can and can't work as such, probably something that needs working out sooner than later.

Thank you - you sound so knowledgeable.

My concern though is that as their host family, we are NOT their employers - they are au pairs earning under the minimum wage, pocket money on a cultural exchange. This is the definition given by the government website!

I am not surprised they are bored - they don't leave the cottage ALL DAY (they help me two hours in the am and 2-3 hours in the evening). But they have been given lots of opportunity to meet other local au pairs (various pizza nights hosted by local mums), and their au pairs meet in town for coffees etc. Except our don't join in! They have NO outgoings living with us so I just need to get to the bottom of their intentions, iyswim?

So if she did extra babysitting, is that really illegal in the eyes of hmrc?

Urrgh - the whole point of an au pair (couple) was to keep things simple!

Sorry - meant to say that by taking a job, they force us to become employers (as opposed to host family) and I just don't want to go down that route.

I've always said I don't mind our au pairs getting a bit of babysitting work, but it must always come secondary to the needs of our family. So, for example, if there is an emergency (ones of the kids needs to go to hospital etc), they would have to drop the babysit to help us out. In reality its never really happened and both our au pairs have done a little ad hoc babysitting for local families after checking with me that the date is suitable.

Strictly, I'm sure HMRC counts ad hoc babysitting as taxable, but I doubt most people who do babysitting claim it and its usually not a lot of money and paid in cash.

I would just sit down with them and explain that you are happy for them to babysit for other people (as long as you don't need them), but you need them to be available at other times e.g. school holidays.

I'm wondering if the government website hasn't caught up, I see it as a grey area in the uk. A proper au pair program would need to be regulated like in the states at the moment you go on any job site and there are people asking 60 hour weeks and paying £80 so they don't have to pay tax. Do the au pairs eat their meals with you and do things with you at the weekend? Do you pay for English classes?

Thing is as I said in above post it would be easier if everyone had to register as an employer with hrmc then it would be easier to regulate where au pairs are coming here and getting ripped off. They should be getting paid at least minimum wage including their acommadation offset.

The whole au pair issue in the uk annoys me. I see it from different angle as I'm a maternity nurse so I get to see these overworked, under paid au pairs in action. At some point it's the children that lose out. It doesn't sound like you are taking advantage though so you need to find a happy medium with your current au pairs.

Mrswishy, I agree with you - it is a grey area where lots if families take advantage. I have a wonderful, qualified nanny two days a week who enables me to leave the three dc for the day if needs be. I trust her to drive my children on the school run (20 mins one way). I am not going to leave my 3 ds (6.5 and under) in the sole charge of a 22 year old. Yet I am always so shocked by friends who do! I think it is too much responsibility, especially for extended periods of time. We have the au pair (girl) to help with breakfast/getting ready in the am and tea/bath/bed in the pm - all under my supervision (expecting dc4 so the extra pair of hands is amazing!). The remaining hours she helps with their laundry and bed linen etc and clears up after breakfast. He does DIY, dog walking, mowing, odd jobs etc. they don't want to go to language school but they come with me on trips (peppa pig world etc). They don't eat every meal with us (I give them a food allowance) but they do come and have an occasional roast with us (DH only around at weekends).

For my nanny I am an employer - very happy to pay the payroll etc as this was agreed at the outset.

Not happy with the aupair stuff discussed above as that was not the premise of them coming to live with us.

We will all sit down and discuss everything.

Thank you (do you maternity nurse in the Home Counties??!!!!).

Sounds like best to talk it over with them. It may be they leave earlier but maybe not. It is unsual for au pairs to come as a couple maybe they will move onto nanny/housekeepers after?

My second nanny postion I was 22 and had sole charge of a 3 month, 15month and 3 year old I loved it. They had a baby sister born when the 3 month old was two and parents traveled for up to three weeks at a time, it was crazy busy but so fun. Although looking back I wish I'd had more help was a lot of work keeping all four happy, attending all activities, appointments and keeping up with nursery duties, I worked 7am-8pm, six days a week!. When I left the family got a full time nanny-housekeeper, an au pair, a cleaner and a bbsitter.

I do work around the UK but as I'm not from the UK I don't know what the Home Counties are. I'm in East berkshire.

I have always consider myself as an employer of my APs. I am registered with HMRC and run all of their pay through on RTI and could use the HMRC software to print the payslips.
If you study European employment law APs are employees and are entitled to all the benefits of being an employee including 28 days paid holiday per calendar year. You can pay them less than the minimum wage as you provide board and lodging.
If you register right from the start you then have all tax free allowance and NI allowance, this what I do. So any other job they get is a second job.