Nanny on long term sick leave - AIBU

[StayAtHomeMumbler]

I am six months pregnant with my second child and have bad sciatica. Our nanny has unfortunately been off work for 6 weeks due to illness (which I have no reason whatsoever to question) and we have paid her in full, despite no obligation to do so. Her doctor has recommended at least another two weeks off and I fear she may need longer due to complications with her recovery. We have been a good employer to her historically and want to continue to support her within reason, as she is a good woman and is a wonderful nanny to our son, but at the same time, I really need support at the moment as I am really struggling both mentally and physically, with no other support available from friends or family at present. I am going to look into getting a temp nanny, but paying for two nannies is obviously not a sustainable solution. AIBU to be feeling hard done by and to be questioning how much longer we can continue to support her when we are not receiving the support I need in return? At what point do we draw the line?

Could you drop to the equivalent of SSP from now on?

What does her contract say? I would drop to ssp if possible. Can she work at all with adjustments?

My doctor will give repeat sick notes without even seeing me.

6w at full pay

You are too nice

What is her illness ?

Down to ssp

Why didn’t you furlough her

And then could have had temp in

I would drop her to SSP

@dementedpixie - in theory, yes. Although I would feel incredibly guilty about doing so ... a couple of days after we gave her her Xmas bonus (a months salary) she asked to borrow £3k from us as her family is struggling with bills/debts as they lost one adults income due to corona last year (not hers - we covered her full salary from March-sept whilst she was furloughed (without any contribution from HMRC)). The loan request made us extremely uncomfortable. Thankfully she retracted her request after we hesitated about it, but it puts me in a really difficult position to now reduce her salary given I know they’re already struggling.

@chocolatepowder - we haven’t received any sick notes from her but I have no reason to doubt what she’s telling us ... she has always been incredibly reliable and truthful to date. We don’t have a contract with her - just an agreed hourly rate.

@Blondeshavemorefun - she caught a viral infection which made her asthma flare up, and meant she wasn’t recovering from the virus as you would expect. She then caught coronavirus from her school age son and is now having some post-covid complications with very low blood pressure and fainting. We can’t furlough her through HMRC as she is self employed. We have never questioned how much tax she declares but I suspect it is a minimal amount; which is why we opted to cover her full pay when we furloughed her last year.

If she is self employed then you don't even need to pay SSP as she is not an employee. However, despite you saying that I suspect under law she is an employee.

Why is she se

If set hours and days she needs to be employed

What hours does she do and what do you Pay her

Tho seiss is done on previous years income when se

So uou aid she didn’t neee to come in but still paid her x amount weekly

Why

Yes a nice thing to do but I think she is treating you as a mug. Sorry

Full pay when se

Now 6w full pay on sick leave

Stop the pay. Sure she will come back

You sound lovely but her money issues
Aren’t your problem not a reason to keep paying her when you neee help yourself and can’t pay someone

As callous as it sounds, why are you covering her sick pay when she’s self employed?

I'd be a bit concerned about her employment status, it's my understanding that it is very unusual to be self employed as a nanny. In any case one of the usual requirements for self employment is the ability to hire sub contractors, so if she really is self employed and off for 6 weeks she would be filling her position herself

If she isn't self employed and you haven't checked, you could be liable for retrospective taxes

If she's working at least 16 hours a week you must pay her paye unless she's working through an agency (could be her own company) who bills you. You could be liable for her not paying correct taxes and ni. I suggest you remind her that as she's self employed you can't pay sick pay or furlough officially and that you will need to consider her position if she's not able to work soon (suggest next Monday. Also inform her that from April you will be paying paye and the advantage is she will get the option of a pension and statutory sick pay

I think you need to be careful OP. It does sound as if you should be employing her (someone can’t declare themselves as self-employed - even through an umbrella company. it depends on the job, not the person (if you’re in the U.K.).

If you do stop paying her, she could turn round and report you to HMRC. It actually happened to an aquaintance several years ago, she sacked her ‘cash in hand’ nanny and she was reported. HMRC went through the previous 7 years of their accounts.
I’d offer half pay for the next 2 weeks and make it clear that you’re now aware that she cannot be self-employed for this position.
There are several companies that can handle the tax issue for you - nannytax, for example.

@DryIce

I'd be a bit concerned about her employment status, it's my understanding that it is very unusual to be self employed as a nanny. In any case one of the usual requirements for self employment is the ability to hire sub contractors, so if she really is self employed and off for 6 weeks she would be filling her position herself

I think you might have dug yourself into a really big hole on this. You seem to be trying to mix and match the bits you prefer of employment and self-employment. It doesn't work like that.

Employment status for tax is determined by the reality of the arrangements. On the face of it, you have an employee.

If you've been paying someone sick pay I can't see you successfully arguing that she is not an employee and you should not have been operating PAYE.

Never mind the fact you describe her as having a salary and call yourself her employer! There is no such thing as a self-employed employee.

Also, an employment contract exists from the moment someone accepts a job offer regardless of whether it is written down. So failing to write anything down does not displace your obligations as an employer.

www.gov.uk/employment-contracts-and-conditions

I think you need to seek professional advice asap. You could have gotten yourself into a world of trouble here and you need to get it put right.

Yes I’m afraid if she’s not paid tax you’ll be held liable for it.
Oh and her unpaid holiday pay.
And NI.
And pension.
I’d add sick but you’ve already paid that, confirming her “employment” status.
She could really take you to the cleaners here.
I don’t know why people think it’s acceptable for some people to choose whether they pay tax or not (your nanny, not you).
Proceed with extreme caution.
Good luck.

Oh dear she’s not self employed at all really. Think you need to review all this fairly sharpish. I wouldn’t continue to pay her sick pay either

She's your employee if you determine her hours, she can't put a sub in to do the work and you pay her sick pay.

You need to speak to a nanny tax adviser sharpish.

I had a lot of sympathy until I got to the bit where you said she is 'self employed'. She's absolutely not. Can she pick and choose her own hours, for example?

It's ironic that you say you furloughed her 'without any contribution from HMRC' when of course you couldn't get any help, as you've already done HMRC and the rest of us out of a lot of tax contributions and her out of a pension and NI contributions (and saved yourself a lot of money in the process), by paying her cash in hand. There's no excuse for ignorance as even a very small Google would have showed you need to pay tax. You also should have had employers insurance, which could potentially have addressed this for you.

I have a nanny and it takes home a huge amount of my after-tax pay, but that's right, because it is someone else's entire pre-tax income. You are not the good employer or good citizen you'd like to be, with your current setup. This is not your nanny's fault, it's incredibly unlikely that you've actually paid her as much as you should have if tax, pension and NI were included, and it's your responsibility as an employer to set up PAYE.

However what is done is done, you can put her on ssp but as others have said, if she ends up out of work, you've put her in a difficult position by making it hard for her to claim certain benefits. I'd try to work together to find a solution in the short term and hope she can either find a new family.or come back to you in ok health once the new baby arrives.

Nannytax or Nannypaye can clarify all your payment responsibilities for you, and send you monthly payslips to tell you what to transfer.

Call HMRC and explain what you've been doing, they'll help you calculate the tax and will actually be quite nice about it. Then find an accountant to sort a retrospective pay roll and pay slips.

It will be fine but you need to sort it.

I think you have an issue here.

Under the eyes of the law I'm pretty sure she would be considered an employee. Which means you would be liable for her tax if hmrc come calling. Not to mention all the other rights of employment. I suggest you take advice on this immediately.

Despite this I think you have been very fair and reasonable. Maybe give notice if you plan to reduce her pay. I would have an honest conversation about when she is due back at work and your dilemma.

Thank you everybody for all of your helpful responses. Yikes ...... we really have got ourselves into a bit of a pickle here. Obviously my ignorance is no excuse but I really thought it was as simple as it being her responsibility to elect to be self employed, we were just trying to be kind in offering additional benefits to her. I don’t think she would ever go to HMRC about this but agree this needs to be sorted regardless. Some difficult conversations to be had I think 🙈. Thanks also for your recommendations for nannytax/nannypaye.

You’re in a mess here and i would strongly recommend you get professional HR to help you sort this out. Not paying for advice will be a false economy.

You can also use the NannyTax calculator to see how much you should owe. I'd brace yourself.

For.example, say you've been paying her £13 per hour net/cash (aware that in London it could be above this too, depending on her experience), for 10 hours a day, 5 days a week - so £650 a week, or £33.800 a year, assuming you've paid her for bank holidays and annual leave (if not, that's an extra few thousand up front, as you should have been).

On that, you should have been paying £11,426 in tax and NI and £1624 in employer pension contribution. It's pretty big.

Here is the calculator www.nannytax.co.uk/employing-a-nanny/paying-your-nanny/salary-calculator#calculator

Eeps. It’s illegal for nannies to be self employed except under exceptional circumstances.

You need to speak to her and cut her to half pay for a few weeks and let her go.

Honestly, paying her full pay on furlough, a month’s salary as Xmas bonus - most people wouldn’t easily be able to afford this unless you are paying her very very little, or you’re very well off indeed.

I would let her go ASAP and hire the next nanny legally. Chances are she isn’t even declaring her income and could well be claiming UC.

@OverTheRubicon @ZaphodBeeblerox
Thank you for your helpful responses. She works 15 hours a week at £12 an hour, so not as huge a tax/NI/pension contribution as you feared @overtherubicon, thankfully! Will get it settled with HMRC.

@zaphodbeeblerox - I had assumed all along that she’d been declaring (at least some) of her income - but if it’s not possible to be a nanny and self employed, how could she have been doing so?

I don’t want to let her go if at all possible - she really is the most wonderful, hardworking nanny. But we are definitely going to sort out our tax position and I’ll be reducing her sick pay going forwards.

Thanks again all!

Who else does she work for

How are the 15hrs spread

Wonder if also being paid by other job/s