Headache-Nanny and tax

[ljones]

Hello

I hope someone can offer some advice. I'm employing a nanny for the first time on a 2 day a week basis. I agreed a net rate of £7 per hour but after reading all the (extremely useful) information on here I've realised that this was silly and I should have agreed a gross figure with her.
Thankfully its not too late as she hasn't started yet but I have to calculate what gross figure to put in her contract. This is complicated by the fact that she works one other day for another family (though she says she'll be keeping to a 3 day week).

So should I..

1. Calculate the gross annual amount using the BR tax code which assumes I will not be able to use any of her tax free allowance or
2. Given that not all of her tfa will be used up by her 1 day a week job try asking the Inland Revenue if I can make use of the balance of her tfa? If I were to do this I would not be able to put the figure in her contact for some time and is it really worth the time and effort it would take to do this?

Really didn't want do use a tax service but didn't count on this headache!!

Many thanks!

To be honest, I would not bother calculating an amount. Instead just pick a figure that you are happy to pay... such as say between £9-£10 per hour. Then it is up to the nanny if they agree to the rate you want to pay.
If nanny insists on 7 net per hour, then base it on BR rate, as without your nanny giving you a P45, you aren't going to be able to use the tax free allowance.
Play with figures at ListenToTaxman. If it was 7 net per hour, 20 hours per week, then I make that £156 gross per week, to get £140.09 take home, for 2008 tax year, BR rate.

Thanks nannynick, some of your other posts have really helped too especially your recent post on holiday entitlement.

Keep up the good work!