PAYE management and HMRC childcare accounts

[Elsieme]

Hi, back in the days of childcare vouchers I had a nanny whom I paid through PAYE, managing it myself with some software linked to HMRC’s PAYE service. It was easy.
My youngest child started school just as childcare accounts came into being.
Now with Covid and schools issues, I would really like to hire her again (and luckily she would like to work with us) but I can’t figure out how this works with HMRC childcare accounts.
I know I need to get my nanny registered.. but then what do I do? I will need to pay the money into the childcare account to get the 20% top up..but then who do I pay? If I paid the nanny direct, then do I pay her NET and so don’t get the top up on employers NI and her tax? (That wold be a bit unfair) , or do I pay her gross? Then how does she do PAYE? Or do I pay myself as the ‘employer’? (But then does that mean I need to be registered as a childcare provider???)
It’s all a bit confusing.

All help and advice gratefully received!

It is just a payment method.

So you would do PAYE exactly as before, preparing the payslip.

Then you pay into the Tax Free Childcare account roughly 75% of the gross pay on that payslip plus the employers NI. I say roughly because you cannot pay pension contributions from TFC.

Once the money is in the TFC account the topup gets added and once cleared payment is available you can then authorise a transfer of the Net pay amount to your registered nanny. (they must have a TFC account setup).
Then once every three months you can pay Employers NI, the deducted employee NI and the deducted Income Tax to HMRC using the option within the TFC account.

You cannot make pension payments from TFC so your payment to the pension provider are separate... such as paying NEST Pensions your employer contribution and the deducted employee contribution.

Thankyou nannynick, that makes sense. I didn’t realise you could pay HMRC from the account. Pensions...another thing that’s new :-)
Lesley

Yeah I was involved with some of the scheme design and making the employer payment to HMRC was bolted on as it is a childcare cost. Adding paying of pension was considered too tricky as parents can use any auto-enrolment pension provider.

To pay HMRC you add them as if they were a childcare provider.