How terrible would it be, IYO, to pay a part time nanny cash? Am I immoral to be even considering it? And how much will it cost if I do it the right way?

[WideWebWitch]

What do you reckon?

I am hoping to persuade lovely woman who currently collects ds from school twice a week, to look after both children after school 5 days, from Sept, in our house.

I am offering her £100 a week + various benefits like paying her car tax and MOT and giving her own child supper etc. I know her well and like and trust her. She may not take it so this is all moot atm. Dh and I work ft oth.

Should I make sure I get someone like Nannytax to sort out her pay and NI etc? How immoral would it be not to do so IYO and to pay her cash?

She has another job which pays very little but where she pays tax and so on.

And if I want her to be paid £100 a week NET how much extra would it cost to pay employers NI etc, i.e. how much will it cost ME, total, per week?

TIA to anyone who can help with either the financial or moral implications.

I am fairly honest and moral tbh and pay my (40%) taxes gladly but want to know the cost implications for me of doing this the right way.

well starting off with the legal

you would be in deep trouble if you got found out

why particularly do you not want to do it above board?

I think I must have read it wrong though - £20 a day for a full day's work with your children?

Because I think it'll cost me about another £300 a month (but I don't know tbh, would like to know difference as may not be the right option, depending) plus I was desperately looking forward to reducing my current £1k a month childcare costs in September.

No, no, £20 for 3.30 - 6pm and til 5pm 1 day a week for 2 children plus hers, plus I feed hers, plus I pay her car tax and MOT.

oh I see! I was a bit worried there

so you think the tax and NI will bump up the cost an extra 75%? can that be right?

F&Z, I'm notg that mean! I've no idea, but just looking on nannytax if I understood it correctly to pay her a net of £400 I think will cost me £600 odd.

I am sorry i am not any help about the actual figures - I have seen people get excellent help on here and am sure someone will help you work it out

I think there is a website that can calculate it for you?

I think you need to look at the thresholds at which being an employer, and having liabilities re tax & NI kick in. I am pretty sure that £100 is over the threshold, but it may have gone up recently. Also the other payment-in-kind things - car tax etc. may constitute part of the remuneration, if she qualifies as your employee for tax/NI purposes.

Nannytax website has some useful stuff on this (including a gross-up calculator for what you'd pay if you were paying tax etc.), also you should have a look at Inland Revenue website for guidelines.

Yes, it says if I want to pay her £400 then cost to me is £596. So sorry, looks like £200 odd, not £300 odd. But then I presumably pay Nannytax for the service too, £260 a year.

Alternatively - if she's already employed - why not agree a gross figure with her? Then she pays her own taxes out of what you pay her.

I suppose the other thing to consider is that the nanny is entitled to have her NI paid so that in future she may collect benefits etc if she needs them

for instance if she left to have another child I don't think you would be wanting to pay her Maternity Allowance? but she could claim this if NI had been paid
also if she was sick, etc - she will not be entitled to any form of help

so it's about 50% extra to do it legally
I don't think you have to go through the nannytax service - you could certainly work it out yourself and save the fees to them, for a start

WWW - the nannytax calculator works on weekly wage - so if you pay 400net per week then it's 600odd per week incl tax. I think that 400net per MONTH will work out a lot cheaper because for example the NI limit is weekly not monthly.

Will have to take a couple of minutes to work it out though.

I think £100 a week is over the threshold.

Tbh, it will only cost me 444 a month to put both in breakfast and after school five days a week, which is a £600 saving on current costs.

But I don't want to. OTOH if it's going to cost me £600 for pt nanny PLUS I will still have to pay for breakfast club at 140 a month then tbh they are going to have to go to bfast and after school 5 days a week instead.

I think it sounds much nicer having the nanny
would it be an actual problem to pay the extra or are you just reluctant to do so (for perfectly understandable reasons)

OK - go to www.nannypaye.co.uk and click on employers information and the nannytax calculator...for £100 per week it says that there will be £0 payable (tax and NI) so you will not be diddling anyone.

I'll try the link www.nannypaye.co.uk/nannytaxcalculator.htm

I also think that (in contrast to most nanny arrangements) as she's looking after her own son as well you have a good case that she is self-employed (so more like a childminder than a nanny) - hence more likely to be able to legitimately ask her to be responsible for her own taxes etc. Worth asking the childminders on here - there are some who know the tax score very well.

Ah thanks Millarkie.

I realistically haven't got time to do it myself so it would have to be nannytax.

So everyone thinks it would be immoral to pay cash do they?

F&Z, we can afford it, we're paying it now but I was SO looking forward to not paying nursery fees of £700 a month from Sept. It means we CAN survive on dh's salary and I am working for savings, deposit on a house, fun, but not because I HAVE to financially (I do have to atm as we're paying off debts)

If the nanny's happy with it, then no one else's business, imo.

You could both end up in deep doo doo if the tax office find out though.

THe gross amount on £100 net will depend hugely on her tax code - if, for example, she owes vast sums of tax then you could end up paying it. Decide a gross term, not a net one. By the sounds of it, she won't qualify for self employed status. You need nannynick on this one, he is a world of nanny beaurocratic information. Maybe you could split the tax free allowance with her other part time job?

I'd ditcht the benefits thing, tbh - paying her MOT and car tax, just muddies the waters imo.

nannytax tax calculator

I think nannytax can work out virtually free, as you get a bonus of some sort if you send your tax bumpf in early (which you do - nannytax do it)

AtheneNocturna is a woman who knows the cheapest nanny tax sorter.

oh that's good!
she's not earning enough to pay tax, is that right?
I thought it was about £5000 for both tax and NI so it could easily be that she isn't getting paid enough

And BTW we are in the same position as you - deciding between breakfast/after school club or someone in the house - and have decided to take the plunge with an au pair..def no tax payable..we are estimating £400 per month for her (pocket money, food, extras) which seems a bit steep for what is actually 7 hours childcare a week, but once you add in babysitting and dog walking it seems a bargain.

Ohh milarkie that calculator DOES say £0, wow, that would be so good if I could do it legally and it not cost me bloody hundreds.

Hmm, well, she does bring her own child but is in my house. Children will be 11 and 5 by then.

Nannytax is one of the most expensive payroll services - plenty of cheaper ones out there - just search the MN threads.

I agree on setting a GROSS wage not a net one - you do not want to be hit by unforseen tax complications (especially since she has another job - it could be that they use all of her tax free allowance and you will have to pay tax on every pound you pay her).

I mean if the nanny's happy to work for cash, then it's no one else's business, morally. The only problem is the enormous wobbling pile of boiling explosive shite you could end up in if the tax bods find out.