CTC and nannys?

[gillybean2]

Are nanny's OFSTED registered? If not can you claim the childcare element of CTC if you employ a nanny and if so how does that work?

Also do most nanny's expect to have some level of housework as part of the arrangement?

sorry jura-should have re phrased it - you are right, it is the tax that is saved on the moneynot that the family gain 240ish towards childcare each month

Thanks all.

The voucher scheme isn't of interest to me because i can't use that and the childcare element of Child Tax Credits. CTC is worth up to 80% of the costs to me, whereas the vouchers only saves me the tax i'd pay, which frankly isn't very much anyway as I'm on a part time and not on a great slaary!

Seems like quite a lot of things I need to think about apart from being registered.

Do I have to employ the nanny and pay the NI and tax? Or can they be self employed and issue me with an invoice and complete a tax return instead?

I'm thinking that they'd likely have more than one job so would be filling in a tax return anyway? Also it'd be easier for me as far as CTC goes to have one bill to pay rather than worrying about all the PAYE and NI etc. They could bill me for the cost of registering etc as part of the invoice too.

It just seems easier all round given they are likely to be completing a SATR anyhow, or am I missing something?

Thanks
Gilly

gilly - yes you do need to be an employer and pay the nannys tax and NI as it willbe a permament job

a nanny can not be se, unless a temp/maturnity nurse - and still some tax offices query this

a nanny can also not work for a family as a se temp nanny if she is there over 6 months,as anything over 6 months is classed as permament employment

if the nanny works elsewhere she could be se and employed at the same time ( se if temping on other days) and employed by you

The vast majority of the time, a nanny is an employee. You would need to operate PAYE, or Simplified PAYE (if paying less than £700 per month gross)

Agree a Gross salary with your nanny.
Deduct from that Employees Tax and NI
In addition, you pay Employers NI

I would guess you would be paying under £700 per month, so take a look at the information about Simplified PAYE.

Makes no difference how many jobs a person has. HRMC will evaluate if they are Employed or Self Employed for each job separately. There are criteria that need to be met for Self Employment, and nannies don't generally meet it. Always assume a nanny is an employee, unless HMRC tell you otherwise in writing.

As you will be claiming tax credits, it is vital that you do things above board... no cash in hand. HRMC will want to see the payment loop... they don't give out free money! They want to see you using your tax credits to pay for approved childcare, and for you as the employer, to be completing the appropriate tax paperwork.