A taxing question about part time nannies and tax

[jojobingo]

We have employed our nanny 3 days a week for a year now. We pay all tax and NI and, as the primary employer, have the benefit of her personal tax allowance. Our nanny has recently changed jobs and her new family has asked to have 2/5 of the tax free allowance. This puts us in a very difficult position financially as our costs will go up quite a lot if we agree. We have budgeted on the basis that it is "ours". I know that the allowance belongs to our nanny and that it is up to her who gets the benefit of it, but I don't want to put her in the difficult position of having to choose between us. This is not a nanny share - we do not know the other family and have totally separate arangements with our nanny to theirs. Has anyone else come across this issue, and how have you dealt with it? Thanks in advance for any advice!

Do you use a nanny pay roll service like nannytax? - they offer advice in this sort of situation.
I don't know of a way out of your situation - but will suggest that next time you employ a nanny you put their pay as Gross in their contract - then you know what you will be paying no matter how many other jobs they get. (Hope that doesn't sound too preachy, but it is mad that nannys get their pay quoted as net most of the time!)

Was told by tax office not so long ago that one family should have all of tax allowance and other family had to use a BR code

you are under no obligation to accede to her request i believe, however, i agree with millarkie if you are using a payroll service i would check with them.

Just say NO. Don't share it. Unless you get informed by the tax office of a new tax coding to use, ignore any requests from anyone else to change what you already have in place.

Consider reviewing your nannies contract... making sure that it states the GROSS pay amount for salary, rather than a NET wage.

Then if the nanny wants to have her tax code split and if HMRC permit that, then when you get the new coding notice from HMRC, it won't affect you as the employer - will just mean that you deduct a different amount from GROSS salary on your employees behalf.