Very part time nanny!

[Roastturnip]

So, I have a 4 month old (and a school age daughter) and will be going back to work when baby is 10 months or so. I work from home and my husband does various shifts but has 3 days off a week. To cut a long story short, my ideal childcare scenario would be to cover most of it between myself and DH but with say a bit of help in my home 3 mornings a week (9 hours or so in total). Having read up on this though I am aware I am getting in to the realms of being an employer if i have a nanny/babysitter and having to pay tax and NI etc. What I can't figure out from my searching though is what happens if the person earns less than the tax and NI threshold? (Which is likely given the number of hours). Would I still have register and become an 'employer'? (I am thinking possibly a student might be interested)

There is a lady advertising locally who is a retired primary teacher and does supply work/tutoring with some baby sitting to supplement income. She has said she'd be interested in helping us out. In this scenario is it likely she could do it as a self employed person?

Any advice greatfully received!

£112 per week is the magic number.
Plus it MUST be their ONLY job.

If they already have other income be it from another job, or a pension (if say a older person applied) then you have to report the earnings and make any deductions required.

Self employment is tricky, if they worked for several families all on an ad hoc basis then maybe - more like babysitting. If you need someone to do specific times, specific days and you insisted they do those, then that is employment. For self employment the person needs to have control, they determine when they do and do not work, they can cancel bookings, they can charge what they like.

As a tutor, are they registered as running their own business or do they work on contract through an agency?

At a guess, I would say you should consider her an employee and do the taxes. Then you have control.

If pay is low there will be no employers NI and no pension payments. You cost will be in the admin - paid her monthly and the admin could be under £200 a year initially, so under £20 a month.

Sounds like Nannynick knows much more than me but when I worked as a part time nanny (three or four afternoons and usually one late night a week) my last boss refused to register as my employer. In order to pay tax I had to register as self employed even though I really didn't qualify (only worked for that family at the time). I never earned enough to pay tax but at least I have made a few more national insurance contributions. A previous employer ran a small business from home and registered me as an employee of that business, perhaps that cut down on admin? I think it is great you are asking all this because most people just want to pay cash in hand.

Thank you both that is really helpful! I'm not sure about tutor lady's arrangements re business/contract etc..would need to ask! In terms of her arrangements with me though she wouldn't be able to commit to certain days and times each week - I'd have to be flexible around her (which may or may not work long term we'd have to trial it). Given its so few hours, I don't want to really go down the route of being an employer, I'd probably just go with a childminder instead. If there was a way of doing it legally though, from home without any hassle of doing tax etc, that would be my preferred option..

Nannynick, maybe you can help: if a mother says this is the job but it's only open to people who are willing to be self-employed, would that be allowed? Would the mother or the nanny be in the wrong if both agreed to these terms?

If the lady is telling you when she's available and how much she will charge and you work around her times and days then she's more likely to be self employed, but as soon as you have any control over the arrangements she's definitely an employee.

Nanny Nick is as usual the one who understands the rules here.

Are you offering a job, or are they offering you a service?

Are they already running a business to which they can have this ad hoc work attached? They are not going to want to do accounts if they are not already having to do it. Supply teaching is usually employment via the supply agency (any teachers able to confirm that?). Tutoring I would have thought was self employment but it may well be via an agency.

if a mother says this is the job but it's only open to people who are willing to be self-employed, would that be allowed? Would the mother or the nanny be in the wrong if both agreed to these terms?

I feel it would be wrong. Legally who knows, HMRC have not published any specific guidance with regard to nannies - yet they have for other occupations. Wish they would write something specific.

Gov.uk now says that the parent is usually considered to be the employer.

I would suspect that it is the parents duty to correctly determine employment status. If HMRC at a later stage determine that someone who claims to be self employed was really an employee, they may persue the employer for National Insurance payments (for up to 6 years) and income tax. See: ESM0117

In terms of her arrangements with me though she wouldn't be able to commit to certain days and times each week - I'd have to be flexible around her (which may or may not work long term we'd have to trial it).

So does that mean you would really be wanting her to commit to doing certain days/times each week/month? If so then it is more like an employee than someone self employed. Sure you could book in advance a bit but her business terms should give her the option to cancel the booking, which may be quite short notice. So it would depend on the terms she gives you - if she is running her own business.

What is it exactly that puts you off being an employer?

It may help to go through the things that concern you there, to see if we can put your mind at rest about some of the issues.

For example:

If you paid £90 per week and the person has other income (such as through work or from a pension), then the taxation in 2016/16 tax year will be at worst:
Gross Salary: £90 per week / £4680 per year
No Employee NI
Employee Income Tax: £936
No Employers NI
Total Income: £4680
Deductions: £936
Net Pay: £3744

Duty to provide a Pension Scheme:
If first registering as an employer between Jan and Sept 2016, Will not apply until November 2017.
Once it is November 2017 you will have to put a scheme in place but your employee can opt of it. They would not be automatically enrolled due to low earnings. They would have a right to join but you would not have to pay contributions (monthly earnings are £486 per month or less).

You do need to provide payslips. You do need to provide paid holiday.

Holiday Calculation:
Statutory Holiday is 5.6 weeks. If they worked 3 days per week, then they would get 16.8 days paid holiday per year. Any bank holidays occurring on a working day would be taken as holiday, so is deducted from this number of days. If the working hours per day varied, holiday is calculated in hours, 50.4 hours per year if 9 hours per week.

It might suit a student who had no other income but even they may have another job.

It is a faff but it is how the RTI system works and for purposes of Universal Credits and other benefits, the system relies on all income being declared via the RTI system.

So either they run their own business and provide you with a service, or you employ them. It does not sound to me as though what you want fits with having a business provide that service to you, as booking someone every time you want it is probably not practical. You want reliability, you want the same person each time.

Thank you! The information you've given is really useful! I think I just thought initially, rather naiively that it would be a slightly more expensive than a childminder but hassle free option. And I liked idea of carer being 1-1with my baby and also that I could be close by. It's the faff of it all that puts me off employing someone aswell as the extra money. I'm not sure it would be worth doing over the relative simplicity of a childminder for the sake of a few hours a week. Don't know, need to weigh it all up!

In terms of tutor lady it could possibly work on a self employed/her providing a service basis insofar as DH always has 3 days a week off in which I can get the majority of my hours in. She has also said if she had to cancel at short notice, she'd usually be able to come on a Sunday instead. (I'd just need to clear it all with my employer but it shouldn't be a problem as long as I get hours in and work done on time).

It could work if she is self employed as a tutor. She would need to provide you with terms of business and invoice you for work done. She would tell you how much her fee is and you would decide if you will use her service or not. The flexibility of it certainly sounds useful and by having the days varying quite a bit, would help to make it fit with self employment better.

A childminder could work though have you found any who would do those short hours on the days you need? Some may have the space but it depends on the time of day.

Payroll is a faff but there are companies who will do it all for you, for a fee. Typically at a cost of £15-£20 a month, billed annually. So being an employed need not be a hassle but it does increase the cost - though you would take that in to account when deciding on the salary to pay.
Various factsheets for employers can be useful reading.