Reducing nannies hours during coronavirus

[BlueMoon6]

Just wondered if anyone else is having to consider this - we are looking to reduce the hours for our wonderful nanny by 20% during the coronavirus pandemic. Husbands work is largely commission based so we’re expecting our income to drop by around 40%. I’m now WFH full time so can cover the extra hours at the start and end of the day.

Our priority is making sure we can keep her and we will go back to normal hours as soon as possible but I just don’t know if what we are asking is unreasonable.

Hi I started another thread earlier that is related in that my nanny is self isolating indefinitely - I think we may be able to use this new government scheme where they are offering to pay 80% of people’s wages so they can keep their jobs during this crisis. I’m hoping this can work for us and waiting till Monday to see what our nanny tax and childcare voucher agencies can advise us.

It perfectly reasonable to reduce nanny’s hours. But have you considered that the government have said it will pay 80 percent of pay ?
Also how long has the nanny worked for you.
If over 2 years she may find the new hours don’t work for her/him and prefer redundancy. Look at any redundancy payments you would need to pay.

The govt pay of 80% only applies if you are furloughing your worker so that means they wouldn’t be working at all. We do still need her to work, just reduced hours.
I think we will have to have an honest conversation with her on Monday and give her time to think about it

Some of my employers are reducing my hours but pay is remaining the same. I will offer them a free date night/ overnight after all this is over as a huge thanks.
If my employers income was reducing then I'd come to an agreement but it depends how much of a drop as to whether I could afford it.

Don’t forget if your employee has worked for you for over 2 years and she prefers to not accept the changed hours then you pay redundancy.

Thanks for the feedback. I feel awful about it and hope we will be back to normal soon.
Yes am aware of redundancy rules. She has been with us less than 2 years.

@Toastnbutternjam can you let us know what they say? I’m self employed and work is drying up. We’ve told our Nanny to stay home (still paying) -as it’s not essential she comes. Current guidance is confusing some talks of companies - others talk of any employee on PAYE. I’m hoping it’s the later. I really don’t want to make our Nanny redundant as I’m worried she wouldn’t find another job; however, we only have limited resources to keep paying her.

I'm also interested in a follow up as I'm in a very similar situation to Strawberry, but as a nanny. Very worrying!

@Toastnbutternjam any update? I’ve been looking on gov website and nothing seems to have been added.

Nannytax are saying Nannies on PAYE (as they should be) can be furloughed.

Wage 2 saying unclear.

I imagine confusion is some parts of gov website suggest only businesses can get this, others any employer with PAYE scheme.

More concerning some of these companies are suggesting it’s a grey area if Nannies can go to work and it’s open for discussion. I don’t know how anyone hearing the PMs speech can think a Nanny going to work is essential (unless both parents are key workers, single parent key worker or parent has medical issues/disability that they need assistance with child).

Why do you need her to work if you are wfh? Everyone else in that situation has been told they must manage, not send DC to school etc

Nanny should be staying at home, her work is not currently essential

@DoubleAction totally agree. My Nanny has been told to Stay Home and I am classified as a key worker, but husband isn’t. I was shocked a payroll company was suggesting it was ok for Nannies to come in irrespective as they can’t work from home.

Just to let you know that it isn’t clear whether nannies can be furloughed and that parents can claim the 80%. The guidance applies to businesses, not merely employers. We as parents are not a business. More clarification is needed but it is in no way a certainty.

@welltidy
Nanny pay are saying as long as employers operate PAYE then furloughed can be claimed. They do recommend contacting HMRC. But this Op is just reducing hours so not applicable.

I know, just giving the information in a furlough context. And are saying that it is unclear and that more clarification is needed.

And way2paye

The issue is about if it will only businesses; however, that would exclude domestic staff, but also charities.

www.businesssupport.gov.uk/coronavirus-job-retention-scheme/

This is most recent details though and it says it will cover all employers with employees on PAYE scheme

Haven’t had time to follow this up what with working from home and home schooling - but seems like it is likely nannies can be furloughed.

One of the Nannies has kindly posted this below.
I hope this helps many of the Nannies!

Saw this posted this eve

Statement - Coronavirus COVID-19 Virus Announcement 31/03/2020 @ 19:15

Our committee has tonight received notification from a Member of Parliament, Bim Afolami, MP for Harpenden and Hitchin, stating that the Treasury has advised that Nanny Employers who employ though the PAYE scheme and were on the payroll before 28 February 2020 will be eligible for the Government Job Retention Scheme should they decide to furlough their Nanny.

The discussion should be between the Employer and the Employee and both parties need to agree. It is not for the Employee to simply decide they are no longer going in to work and demand to be paid or they could face disciplinary action. The family can only furlough your role if they do not require a replacement childcarer. Upon coming to an agreement it must also be put in writing with particulars of the furlough set out in a written document, signed by both parties.

The refund payable to the employer will be 80% (capped at £2’500) of the Nanny’s monthly salary.

We hope this is of help and clears up some of the doubt that has been prevalent in the last week concerning nannies being eligible for the furlough / Coronavirus Job Retention Scheme.

Thank you and stay safe.
The Association of Nanny Agencies
Tel: 0203 1500 365

Just FYI current guidance says the payment made to employers is subject to income tax payable by the employer (even though the employer pays it all to the nanny). That is IF it applies to nannies.

@Bonkers1234 do you have link for income tax being payable on the payment to the employer? If this is definitely the case we may have to rethink topping up to 100%!

Yes it’s on the Gov main website I’ll try to link. It talks of the grant being taxable for businesses but is silent on individuals though it does refer to income tax which is typically an individual rather than business tax. I’ve taken specialist advice and they too agree it is likely to fall to be taxed as income meaning both income tax and NI so looking at paying c50%. Plus add on accountancy fees in formally declaring it in your tax return as they too will need to look into it. I’m seeking further advice and clarity but presently I’m told it’s likely to be taxed. Gulp!

www.gov.uk/guidance/claim-for-wage-costs-through-the-coronavirus-job-retention-scheme

Tax Treatment of the Coronavirus Job Retention Grant
Payments received by a business under the scheme are made to offset these deductible revenue costs. They must therefore be included as income in the business’s calculation of its taxable profits for Income Tax and Corporation Tax purposes, in accordance with normal principles.

Businesses can deduct employment costs as normal when calculating taxable profits for Income Tax and Corporation Tax purposes.