Best friend wants to be DD's nanny

[NannyBestFriend]

NC as identifying.

DD (17mo) has been going to nursery since she was 5mo, for 16 hours per week. Not very happy with it for various reasons and thinking of moving her.

My best friend, DD's godmother, works there, though in a different room. She's just finished her qualifications, and has 6 years experience in a nursery setting. She's been looking for a part time nannying job.

She asked me a few days ago whether I would consider giving her a job as DDs nanny. I said she would have to get OFSTED registered, as my childcare is part funded from uni. She said she would, but obviously needs to look into what this would entail.

I'd want her to have her whilst I was at uni, and I have also started a new job where I'll be working 1 or 2 night shifts a week (depending on uni schedule - v flexible) so she could come and grab DD before DP goes to work and I can sleep whilst she cares for her. But overall it would be between 15-20 hours per week.

I'm also thinking of getting a dog. She's recently got one, so I thought she could possibly take both dogs with DD for a nice walk in the morning, drop them back to their respective homes or leave them at hers while she plays with DD or takes her to toddler groups, soft play, the beach etc. I think she would be really happy with this as she would be walking her own dog too, and DD would love chasing around after the dogs.

Sounds like a brilliant idea to me. My DD worships her, and were like sisters - never argued in 12 years of friendship, and I know we share very similar views in how children should be raised: I would feel comfortable in raising an issue I wasn't happy with or whatever.

But I feel like this might be more complicated than it seems. If she is my nanny, does that mean I am her employer, and have to pay NI contributions etc.? Does anyone have any experience or advice on the situation?

A few things you need to be aware of.

If she is going to leave the nursery to work for you, there may be a clause in both your and her contract with the nursery that you cannot employ a nursery worker for a year after she has left and she cannot work for a previous client for year after the client leaves.

If she is going to continue to work for the nursery and do overtime for you, you will need to be registered as an employer. You will have to pay her minimum gross wage wage (or above), do pay roll for her and pay employers NI. If she is going to be a nanny, she cannot look after your child in her house for more than 2 hours a day. A nanny works in the child's home, a child minder works in her own home but has to register as a child minder and follow EFYS and do a lot of paper work!

Lastly, never employ friends or relatives! It very rarely ends well. My dad and his brother barely speak 30 years after dad hired him to work for him.

Sounds like. Sure way to ruin a friendship!
Oh I know that's really cynical and miserable but honestly I just wouldn't. You would have to be her employer, pay tax/ni, all that, and give her kitty money, and what if things weren't going well and you had to sack her. Urgh. I really wouldn't.

You'd have to pay minimum wage, holiday pay and SSP (sick pay) and give her a wage slip each month. Also you'd have to pay into her pension. Not a cheap option...

Afaik nannies don't attract tax credit childcare funding so you may need to check that the funding yitu get from uni doesn't have similar exemptions.
And tbh i think it could ruin your friendship. Either she's your friend or your employee. Trying to combine the two rarely works.

This link might be helpful, it seems to explain vouchers, tax and so on
www.nannytax.co.uk/financial-support/childcare-vouchers

Also a nanny works at your home, if she is taking your child to her house whilst you sleep she needs to be registered as a childminder

You do need to do the whole shebang, and have contracts and everything - I had a local accountant do it, she charged me less than £500/year.

There is also now a requirement to have a pension scheme, but I stopped employing my nanny before it came in, so I don't know what is available to help with that.

I employed a friend (DS1's schoolmate's mum - so we spoke at the gate a lot, but didn't actually hang around together away from school) - and it worked perfectly for us. She had a job that worked around her child (DS1 and her child were best mates, so no issues there), I had someone I trusted to look after my two around school.

Honestly, it was perfect, but very expensive once I'd done the pay, mileage allowances, NI etc. After 6 months I switched to a childminder, and it cost 10k less/year for more hours.

Oh god! I definitely have no worries with the friend/ nanny issue. But everything else sounds very complicated, and I'm skint. I thought it would just be a way of using the £600 a month my uni gives me for childcare in a different way. But I don't have the money or time to deal with the other stuff mentioned. I thought it might be more complicated than we thought. Thanks for all replies

Just out of interest, if I just paid her by bank transfer every month (no payslip etc), what would happen? Who enforces this and how would anyone ever get 'caught'? And what happens if you do?

I'm probably not planning to, btw. But I know she'll wonder too.

NannyPaye has a useful factsheet about what is involved in registering a nanny with Ofsted. http://www.nannypaye.co.uk/wp-content/uploads/2016/01/Brief-Ofsted-Guide.pdf

They can help with doing the payroll, think they charge around £180 a year for monthly payslips, bit more for weekly. Don't get panicked about being an employer, that is what the payroll companies are there to help you with.

Good point about you both checking nursery contract, as they don't like staff being poached.

I know somebody who paid a nanny under the table. Cash in hand every week.

They were found out and had a £14,000 fine given to cover the tax unpaid plus extra

I expect people are caught paying undeclared when their employee realises they are meant to have payslips, such as if they apply for a mortgage other loan. Don't risk it. Work out the costs involved and see if it is something you can afford. I expect we can help you on here to identify likely costs.

You expect her to look after your dog too

Yeah sounds like a great idea!

The likely hood of you being caught if you was paying her cash in hand isn't very likely, but to be honest if you can afford the initial cost of setting up her working for you I don't know if i would run the risk of paying her illegally. And i personally would not employ a friend. I've seen a few post where it hasn't ended well. Friendships broken jobs lost etc.

You wouldn't be able to pay her under the table as your childcare grant from uni will want to see invoices from your childcare provider - and they would need to be registered.

If you did it by bank transfer to evade the tax and employment obligations that is not going to be ok.

Why would your friend go along with it? It would mean she wouldn't be entitled to statutory maternity pay or JSA if she was out of work.

If you want to employ her that's fine. If she registers with OFSTED then the funding that is available for nursery is usually available for that. You would be her employer and liable for the employer's NI as well as deducting her tax and NI from her pay and making the payment to HMRC on her behalf. You would need to do payslips and real time reporting of her hours but you could pay a payroll company to do this. You're looking at about £2/300 a year for this. You would also need to offer and operate a pension scheme plus pay her 5.6 weeks holiday per annum, pay at least minimum wage and possibly also statutory sick pay if she earns enough from you for that to apply.

If she works for you for more than 2 years then you will also need to pay her redundancy if you decide to stop using a nanny.

Complicated isn't it?!

My uni doesn't ask for invoices. Just a form where the provider fills out weekly costs and signs at the bottom, with their ofsted reg number.

I mean, it does sound complicated, but £300 a year isn't much. Obviously would pay her more than NMW! I was planning on paying her £10 an hour, but I guess it might be better making it £9 to allow for NI etc.

I'm happy to give her paid time off. But would national insurance even be an issue as I won't be paying her more than £700 a month, which IIRC is under the NI limit? I don't mind paying

I dunno. I'm stressed enough as it is tbh with a crazy toddler, a new job in a psychiatric hospital and the pressure of securing a first at uni.

But I know she would provide my baby with as much love, care and attention as I would. And I've worked in enough nurseries to know that it is very hard, if not impossible, to find one where you can say the same.

Oh, and in regards to the dog. She is madly obsessed with her dog, and is begging me to get one so she can look after it whilst we go on holiday. If she minded taking them both for a walk in the morning, I would make other arrangements, but I have a feeling that will most definitely be considered a perk of the job

16 hours per week @ £9 gross per hour = £144 gross per week. It is over the £112 lower limit so it needs to be reported to HMRC. No employers NI at that pay amount.

16 hours per week @ £10 gross per hour = £160 gross per week. There is 55p per week of Employers NI at that pay amount. Think it may depend on age though, as young workers are being encouraged and employers NI is reduced for some. NannyNick is better at this than me.

I would think about how it would work with your DD being around at home more than she is now. Would you really be able to sleep with her playing downstairs? Would you be able to do uni work at home - are you able to lock yourself away in a room and get on with an assignment whilst hearing noises... it can be hard to insulate totally from noise from other rooms. Sure your nanny can take DD out and I would encourage that as much as possible but outings cost money... even a toddler group can be a couple of £. So you need to budget for outings and activities. Nursery probably includes most things.

You also need to contribute to a nanny pension now

Isn't pension being phased in, thought it would not apply to a new employer until late next year?

Well yes but surely that's something op should consider? She can't just get rid of nanny in a few months due to pension scheme costs

If she is doing something you don't like, how will you handle it with her? What if you decide the arrangement isn't working for some reason, how will you end it? What if she gets a better job offer, will you be OK with it if she quits? What if she wants a pay rise? Cost of living will rise lots this year due to the pound falling so it is likely she will want a raise.

Tax authorities are clamping down hard on tax avoidance. They can get you and her many years later. Will she want to put you on her CV? Or is she going to pretend she didn't work for the time she was with you?

Avoid

Never work for friends or family. It will end in tears

Can I ask why you are getting a dog for someone lese to look after? Dogs are pack animals and need someone around them during the day. I have had to turn down jobs over the years as my dog like a child comes first. I never risk walking him with a pushchair you have to consider dogs running off getting attacked or injured, 2 young untrained dogs and a baby no way let alone the idea of giving the problem to somebody who is caring educating and nurturing your child while you leave them to it.
Have you ever had a dog they are more of a commitment than a child mine now costs over £200 a month were all on holiday next week and he's at the vets right now looking like its a choice of dog or holiday so no holiday he's too ill.

I would never employ friends.