Another boring tax question

[Mummyofthreebeauties]

My new nanny pays her own tax. She has been nannying for years (she is in her 50s) and she works for another family as well as us. I don't doubt that she is above board and with her first pay cheque I did a payslip and stated that the tax was nil as she was paying her own.

Do I still need to declare to someone that we are employing her/paying her or am I just being paranoid?

Your nanny is your employee. As she is YOUR employee then it is YOUR obligation to pay tax and national insurance. Not hers.

There are plenty of websites that will help you and there are quite serious penalties for people who defraud HM Revenue & Customs.

I am not attempting fraud. This was her choice which she made clear at her interview and as I said this is how she has managed her earnings for many years (it allows her to manage a number of nanny positions).

The amount we pay her takes account of the fact she is covering her own tax, etc.

it doesn't actually matter what her choice is - what matters are the FACTS of the matter - and if the facts of the matter ARE that she is your employee (based on tax and case law) they YOU will be the one who is responsible, not her.
I would get professional advise on this to cover myself.

Yeah sorry you need to pay her tax. You can be fined £3000 for not doing so. I've been nannying for 13 years and have never been able to pay my tax. Maternity nannies can pay their own tax and temp nannies but not permanent nannies.

Thanks Chasingsquirrels, it has been niggling at the back of my mind. As its the first time we have had a nanny I bowed down to her greater experience. Her other employers do the same (one of which is an accountant!) so presumed it was legit. Would a standard financial adviser be able to help or is it legal advice we need?

Thanks Quattrcento for the supportive advice to somone who looked to mumsnet for some advice on a genuine query. The accusation of me being a theif will make me think twice about posting her again. It is this kind of attitude that will have more people 'stealing' rather than coming her, asking the naive questions and sorting things out.

Sorry Mummy, was completely out of order.

I was confusing you with the other "I'd really rather not pay any tax and national insurance because it's so expensive, does anyone know what the legal penalties are" thread.

mummy of 3 beauties

the law changed about 3 years ago now... (or is it 4?)

it is now illegal for a nanny to be self employed (but eys could be done a few years ago)

the reason is nannies dont meet self employment criteria.... different hours in differnt homes where THEY choose the hours and decide weatehr to work or not etc.

There are very very few exceptions (one being maternity nannies whose contract only last a few weeks at a time, and they too ahve probs if there were to remain over 6 months)

As you have a nanny you have to be her employer and therefore have to pay employers NI contributions as well.

If you dont pay you employers NI contributions, then the government will fine you £3000 is they found out

Im sure this isnt a risk you want to take so if i were you id tell her about your legal obligations as an employer, and how her job does not fit self employment criteria and that from now on you will be passing erh tax and NI on to inlnad rev along with your own wmployers NI contributions...

that is perfectly fair, you are not cheeting her out of any money and you save YOURself the work.

Any nanny agency or nannytax or even the tax office people will tell her the same if she wants to check

meant to say you save yourself the RISK (not the work!)

Thanks NannyL for the comprehensive and simple explanation. I have looked at lots of nannytax websites this afternoon and none have provided such a good explanation, you should go into business!

I am hoping the timescale of the change 3/4 years ago explains why our nanny thinks she can pay her own tax. I will raise this with her on Monday, I am now really worried that we could lose her. She has been fantastic with the children and having a nanny has made my return to work on 2/1 so much easier.