Would a nanny's Xmas bonus affect her Universal Credit?

[idontknow54789]

Just that really. We employ a nanny three days a week (she's self employed as she also works for other families the rest of the week) and was going to give her a Xmas bonus equivalent to one weeks pay but now I'm thinking that might affect her universal credit which I know she also claims. Does anyone know if this is the case? Should I give her vouchers instead? - I'd rather do money as I know it'll be more useful to her but I don't want to mess anything up.

I came on to say exactly what SW1 said, give her a cash gift from the dc, not you!

Amber 🤣🤣

@BirdsBirdsBird

No of course not, but your Granny is not your employer! Otherwise all employers would be able to hand over cash and claim it was a gift and thereby avoid NI and tax. I can't help it if you feel that the law is wrong - I didn't make it, I'm just letting the OP know so she doesn't end up in a tax messs.

Yes, get it now! Sorry, I speed read and didn't take on what you had said,which of course is correct, although I don't agree with it. Bloody greedy tax man!

I mean, I know what your are saying is right re employment status, but really you think cash is outside the parameters of legality (wtf) and builders customers should be responsible for making sure builders pay tax. Cmon now 😂

www.leighadams.co.uk/news/latest-news-for-business/archive/news-article/2019/December/making-sure-gifts-to-employees-are-tax-free

I've found this seems a bit contradictory but it's from the hmrc handbook

@FunnyInjury

I mean, I know what your are saying is right re employment status, but really you think cash is outside the parameters of legality (wtf) and builders customers should be responsible for making sure builders pay tax. Cmon now 😂

The OP is also dodging tax by not treating her nanny as an employee in the same way that someone paying a builder cash in hand is dodging VAT. Turning a blind eye/ignorance is no excuse as far as the tax man is concerned.

Cash and/or bonus from employer should be declared on UC claims. Otherwise it's fraud.

It’s not paying cash in itself that’s the problem. It’s that certain types of cash payments are very likely to be a tax dodge, particularly without the right paperwork involved. No issue in paying a legitimate builders invoice that includes VAT in cash.

@BirdsBirdsBird

Sorry to be a spoilsport, but vouchers and cash from your employer are just the same as if you paid it in the nanny's payroll and should be taxed. A non cash or non voucher gift would be free of any tax implications.

That can't be true as I've received vouchers from work as gifts or prizes before and not had to declare anything.

Yes agree, you can't just decide to be self employed. It doesn't work like that!

Can't comment on the self-employment thing, but want to point out (again) that it is possible to earn a very good income and still be entitled to (and need) UC top-ups. For example, if you rent in a relatively expensive area (including all of London), or if you have substantial childcare costs. I used to get a bit of UC whilst earning around £35k - I'd not have been able to pay my rent (two bed flat in a ropey corner of London) and nursery bill without it.

That can't be true as I've received vouchers from work as gifts or prizes before and not had to declare anything.

In which case your employer is probably already paying the tax on your behalf. That’s what happens at my place. Staff entertaining (not that we’re allowed to do any of that any more!) is particularly “expensive” because the cost is grossed up for tax.

Sounds like you shouldn't tell anyone you gave her the cash.

OP, I employ a nanny for 3 days a week. She is definitely not self employed. I pay her national insurance, pension and holidays. She pays tax. You are on dodgy ground with claiming she is self employed, obviously a lot of people would claim that if it were true to save paying the above.

Another vote for the fact a nanny can’t be self employed normally. If you require them on set days etc then they are your employee regardless of how many people they work for etc. I know someone pulled up by HMRC for this; the guidance is very specific and as an employer you are facing huge fines for not abiding by this. Be really careful.

@NellWilsonsWhiteHair

Yep. A poster on £47,000 with one child was told she'd get UC about 2 weeks ago.

So a nanny certainly could.

@TuftyMarmoset

It's not cheap if you pay them legally as an employee as you have to pay employers NI etc on topnof the nanny's wages plus holiday pay etc.

Much cheaper to pay them as 'self employed' but almost never meet the criteria to be SE.

The problem with self-employed status is that the employer can be fined heavily by HMRC if they get it wrong. HMRC will normally only let nannies be self-employed for tax/NI if they work for more than three families at a time and are OFSTD registered for that or if they are working on a series of numerous temporary contracts. Confusingly,anyone can register with HMRC as self employed but that does not mean HMRC will regard them as truly being self employed for tax.

Just to add OP - my nanny also works for another family on another day, that just means she has two employers, both of whom are liable for pension, NI etc. Both of us pay her through a payroll agency and this is an entirely normal scenario for a nanny.

Fucking hell is the bloody Grinch on here tonight??

@SleepingStandingUp

I do find it a sad state though that someone presumably working full time as a Nanny so a job that requires a level of responsibility is still on UC. Not in a "she shouldn't get them" but in a "how have we gone so wrong that she needs them"

Totally agree

@Pumpkinsonparade

Fucking hell is the bloody Grinch on here tonight??

👏😂

Why are you not paying her enough that she doesn’t qualify for UC? Why do you think it OK for taxpayers to subsidise you?

[quote imonlyhooman]@idontknow54789 a nanny can't be self employed, you are employing her and are responsible for her tax and NI. [/quote]
Read the thread. The nanny works for several families and can be and is self employed

@WorkingItOutAsIGo the nanny only works part time

@Terminallysleepdeprived That isn't the reason you're self employed. You can have more than one employer, and as stated previously, you don't just decide yourself to be self employed. There are certain threshold to be met.