tax confusion - please help

[jujumaman]

Hello, I'm in the process of finding a nanny but the one I like most says she charges £12 an hour gross which works out at £8 net, then does her own tax.
This seems excessive even by London standards plus I didn't think nannnies could be self employed. We agreed it might be cheaper for me if I did her tax myself - I've done it before for another nanny so am happy to do it, but what I need to know in the first place is how you work out the gross and the net ie if she gets £8 net what will I be paying overall? If any clever person can answer this I shall be forever and ever grateful. Thank you

[nannyj]

Maybe give nannytax or nannypaye a call. I know lots of nannies who get £10 an hour net but it depends on where you are of course. Nannies can't really be self employed i don't think, so i would be careful that she says she's going to pay her tax but then pocket it instead.

[OFSTEDoutstanding]

Nannies can be self employed I was.
However I can't comment on how much you pay her as I was in the country and it was about 10 years ago think I was on about £5 hour!

[Millarkie]

£8 per hour net does work out to about £12 per hour gross (you need to tell us how many hours per week in order to get a real figure as net -> gross is not a straightforward relationship) and £8 per hour net is a typical wage for the area of London I was living in.
However, I would be very suspicious of a nanny who claimed to be self-employed - they just don't fulfill the Inland Revenue criteria for self-employment in the vast majority of cases.

[WanderingTrolley]

V difficult for nannies to be self employed now.

£8 hour net bog standard in London.

I am a suspicious, cynical sort, so I would be wondering if she wasn't going to be a little creative with her tax returns. Which is fine, it's her funeral if she gets caught, but you'll have to prove to the tax office that you are not her main employer, I would guess.

Get in touch with a nanny payroll. Nannytax have a calculator which gives you an idea of overall cost.

[NannyL]

It is very unusual for nanies to be able to be self employed in 2007 becayse we dont meet the criteria for being self employed...

ie we dont choose our work hours or choose if / when we come in etc.

The rare exceptions are maternity nurses and i herd somewhere once where a coupld of nannies worked for a few hours and did difefrent hours with different families each week.

A conventionaly nanny in the uk (ie who does set hours of set days in the same home etc) can not legally be self employed and of they are its the employer breaking the law and avoidung their employers NI contributions, so therefor inland rev will be only too pleased to fine the employer £3000 for not employing a nanny.

as an employer (IMO) its not worth the risk and companies such as nannytax etc will be happy for to work out what wage you need to pay her!

[NannyL]

ofsteadoutstanding 10 years ago you could be a self employed nanny, but the government changed it in april 2 (or was it 3?) years ago so now 99.99% of nannies do not fit criteria for being self employeed

[nannynick]

jujumaman, how many days per week are you employing the nanny? Is it fixed days per week, fixed hours?

I would not think £12 per hour gross to be too high, if the nanny was working on a very ad-hoc basis. If the hours/days are in anyway fixed, then they would be an employee - so you offer them a Gross salary, but deduct their tax and NI plus pay employers NI.

NEVER AGREE A NET WAGE WITH ANY EMPLOYEE.

[jujumaman]

Thanks a lot for all your good advice so far. At the moment this nanny works on a very ad hoc basis for various families so I don't think she is on the fiddle but agree if she wants a regular gig with me things may have to change. I will be employing her fixed hours probably two days a week. I guess the thing to do is to offer her a gross not net wage - anyone now know what would be normal in London for two days a week/ten hour days? thank you again

[nannynick]

£70-£100 per day, so £7 to £10 per hour Gross.
Perhaps a bit more even depending on local market forces.

Try looking at agency listings to get a feel for what jobs are around with comparable hours.

[NannyL]

nick dont you mean £70 per day NETT in london?

i would have thought £70 gross is VERY low!

[nannynick]

I'm only 20 miles from London and on what works out to be £7 gross, so I would say it depends on the area. Also, depends how disparate people are looking for work - the more nannies there are looking for work in any particular area, the lower the wages can go - as supply of nannies exceeds demand from employers.