Nanny - Tax and NI

[Persis101]

I am employing a nanny for approx 8 hours per week. This is not through an agency and I haven’t done this before so need some advice please! She won’t earn enough over the year to pay tax or NI - but what happens with HMRC? What are my obligations? Do I need to register as her employer and pay her through PAYE?

You need register as employer with HMRC, you need to look into sorting out pension you still need sort forms and jump hoops even if they choose not to have a pension. You need payroll company handle with Tax and NI. It’s not as easy as cash in hand.

Will you be their only source of income? Will you pay less than £120 per week?
If yes to both then you don't have to register as an employer. You do need to keep records.

www.gov.uk/paye-for-employers

@nannynick Thanks for link, that is useful. Yes I will be the only source of income and yes they will earn less than £120 per week. Will I need employers liability insurance?

Yes though unlikely ever need it, you also supoosed to do basic health and safety procedures with them. I think my insurance was around £140 a year has leaflet about safety. It’s more cover them having an accident and suing you. Home insurance might also want to know or they get anything not validate a claim.

For those hours would she not be better off being self employed (I can’t remember the threshold but I’m pretty sure she’s under it)

@Akire Thanks so much for the info! I hadn’t even thought about letting my home insurance know, that’s a good point.
@Username7521 Could you explain more please? Better for her if she’s self-employed or for me? I didn’t realise nannies could be self-employed. I assumed I would have to set myself up as her employer.

You can't legally just declare yourself self employed. It's a test based on the facts and assuming you require her to turn up herself, wouldn't accept someone else in her place, want her to work specific hours and do things in a specific way she's unlikely to count as self employed. If you treat her as self employed when she's not you risk a big bill for unpaid tax and national insurance.

Check your home insurance. Mine covers employee liability insurance.

Rules for self employment are very narrow. If you asking them to attend set hours set days then you are the employee.

@NotVictorianHonestly @Akire
Thank you both so much for your advice, really helpful!

Your home contents insurance usually has employer liability included, though insurers have been removing that to lower costs, so check your policy.

@nannynick Thanks! I will definitely check my policy.