Buying a flat for nanny

[UnicornRidge]

Can any wise men/women share their experience?

We are considering buying a 1 bed, or 2 bed flat, close to our family home, for our future nanny, when we move back to the UK.
DH is not keen to live with a stranger, albeit on a different floor.

Both of us work long hours. Live in is a better option. The going rate for a nursery place in central London is £2k per kid. It can easily add up.
If we get a two bed and rent one room out, can we rent it out on a lodger contract? The bills will be in our name.
When we terminate the nanny contract, do we have to evict the nanny through some special procedure?
Regarding tax, is it a benefit in kind that is taxable by HMRC?

Thank you!

This does happen when non aware people are too hot. Hive helps.

You need proper legal/tax advice. Your questions are entirely reasonable but there will be technicalities which only a professional can answer.

It might be simpler for you to rent a room for your nanny near your home. Neighbours of ours did this as they essentially wanted a live in nanny without loss of privacy. It worked well for them.

Because I have met many people who do that. When your rent include bills, you stop caring about things like that.

Have a look here OP.

It says IMPORTANT: Where employees do not live as part of the family, providing accommodation for employees outside the employer’s home may well attract a very substantial tax charge. Employers are advised to take advice on this before offering an employee any such accommodation.. I don’t know the details but it certainly doesn’t seem straightforward.

If I were you I would look for live out nannies. There’s more choice of live out candidates and they are more experienced and stay longer IME whereas live in tend to be on the younger inexperienced end and prefer to move on to live out jobs once they have found their feet. Yes live out nannies may not work quite such long hours, but 10/11 hours is quite usual for live out in London. Would you really want someone spending 12+ hours a day looking after your child? Neither parent would be seeing them for bedtime, and the nanny would be tired and probably not on the best form by the end of the day.

Thank you. I will look into that.

To those who think people don't turn heating up to 30C and keep the windows open, these things happen when people are not paying for it.
My friends run Airbnb. Many people rack up the heating /AC and keep the windows open. Many landlords include a fair use policy in their rental contract if their rent include bills.
It is human nature when they don't pay for things. They stop caring.

Thank you. Very helpful.
We looked into that but the room rental rate is £1k+ a month, hence we are exploring a flat as an alternative option.

Would appreciate if anyone can share who they use for tax and legal advice regarding this.

Why don't you just have a nanny who lives in her own home? If you don't want a live in nanny, get a live out one.

Why are you complicating it?

Thank you for sharing your experience.

The rent is not affordable for a nanny within a mile radius from the house. A live out nanny is likely to travel from somewhere further out.

When browsing other people's ads in the area, most offer a separate flat or an annex type self contained accommodation.

This is my concern. I am looking for a property and employment, tax and legal advisor. These two don't come together easily. Hence asking on Mumsnet for any pointers.

Avoiding the big4 as I have friends working there as tax accountants. They do personal tax as well as commercial.

A decent employment lawyer experienced in this area will also be able to advise on the (fairly simple) tax and property aspects. It’s not actually that unusual a set up. You don’t need a big 4 accountant.

Just increase their wages so it would cover the cost of renting nearby?

Why do they need to live within a mile? Lots of nannies don't live within a mile.

@UnicornRidge I’ve sent you a DM.

Can you so a loft conversion?

Why not sell the mid terrace home and buy a bigger one with an annex, if you can afford to buy a separate flat (plus extra stamp duty etc)?

the law quite rightly gives protection to people whose accommodation is provided by their employer. it's a difficult situation as it means that if you lose your job, you lose your home at the same time and that is an awful prospect. Any deduction from wages for accommodation can only be very modest and there will be a longer notice period required if you do terminate the employment so you will need to plan for what to do if you no longer want her looking after your child(ren) and employ a new nanny but the previous nanny is still the legal occupier of the property.

I don't think it's reasonable to expect the nanny to live in a shared house with a random stranger of your choosing. There's too much potential for that to go badly. As pp say it can't be a lodger arrangement - those are only applicable if it's your own home and you are sharing living space rather than having self-contained areas, which you are clear you don't want.

I would suggest that if you have the money to buy a flat like this then rather than actually buying the flat, consider 5% of that value to be the annual amount you would effectively be paying on top of wages to provide housing, so rather than spending the capital, offer the job at £salary plus £housing allowance on the condition that the employee must live within a maximum of 15 minutes travel time of your home, then let them find something that works for them and doesn't get snatched away if they lose their job or have their employer snooping on their energy usage.

If you can afford to buy a flat for a nanny, then you can afford nursery and then a nanny for wrap around care, surely? But if you really need that much help, perhaps it might be worth cutting your hours a little.

I'd have thought it would be more expensive on aggregate to buy a house + flat given CG, stamp duty and council tax implications plus cost of landlording. Accommodation for an employee also adds complication.

Larger house with annexe, or buying a house + BTL flat, or house for you + pay housing /travel allowance for the nanny are all options to explore.

Why don’t you have two nannies? It’s not uncommon in certain high earning circles. Doesn’t sound like you’re short of a bob so makes sense. You could have someone from say 7 to 4 and then someone else take over from 4 to 9. Easy.

So you are buying a mid terraced house in London with a small garden and are commenting that a £2k a month nursery and energy bills are expensive.

Yet you can afford a nanny and a separate flat for the nanny as long as she doesn’t take the piss with heating.

Sure, sure.

I'd use a tax advisor personally and let the tax person sort all payroll/annual leave and benefits in kind calculations out. Our nanny is a day nanny. You can put things like the set temperature of the house in their contract and monitor it using hive.

Incidentally our nanny was a live in nanny for many years before us, she mentioned once she returned early from a holiday only to find Mr employer was using the flat to have an affair while the she was out. Put me off using this option!!!

Good luck. It's so so hard to manage someone who cares for your most precious little ones!

Why not look for a live out nanny? The fact your renting them a flat nearby would not make any difference you still have contracted hours you can't just say I'm late tonight you will work it or get on a phone and say get here early etc. Those things would still need to be agreed in advance so I don't see the benefit.

Isn't a nanny plus all your going to pay out way more expensive than a nursery? You must be looking in a very exclusive area surely the flat is going to be at a premium price too

Ask a Nanny agency for advice. Or an Au Pair agency. Even if you want a qualified nanny rather than a Au Pair, Au Pair contracts always include accommodation so the agency will be able to direct you to the appropriate employment laws/info around providing accommodation.

If you ran holiday lets you would know that many people do this! If they are not paying they don't care. Shocking but true.

I had a woman argue with me on here about it. Apparently I was greedy because I didn't want my guests to do this.