self-employed nanny?

[beforesunrise]

hi there, i have just interviewed a lady for a nanny position. i liked her and she seems to have stellar references (whcih i haven't checked yet). the only thing is, she told me she is self-employed and insisted that i pay her £x per hour and she takes care of the taxes. a quick browse on the internet seems to suggest that's illegal. i currently pay tax and ni for my current nanny and i use an agency, so i don't have a probelm with that- but clearly it would be easier if she took care of her taxes.

can anyone tell me what the status is?

many thanks!

If she is going to work regular hours for you on a permanent basis, she is being employed by you

If it only ad hoc or temp, then yes she could be self employed.

Who is setting the hours and days worked? If it is you - then she is employed and you are responsible for her tax and NI

I'm a self employed nanny. It is possible to qualify as being self amployed if you work for several families or are on lots of short term contracts. In my experience they haven't ever checked out who I work for or anything. The other thing people do is register as a childminder (who are always self employed) and work in other peoples homes. The reason I decided to become self employed was that so many people aren't willing (or possibly able) to sort out paying tax.

I would be careful though as if she doesn't pay her own tax you could be made responsible for it. I would have a word with her about it. It may be that she's willing for you to pay her tax and NI if you can reassure her that you will do this.

There was a post about this yesterday which is worth a read - What Status Officer Said, from navyeyelasH
"If the work becomes more "regular" with a family then they MUST employ you. But the status officer said that the words "regular" are open to negotiation and reflected in case law."

beforesunrise - can you tell us more about what the position is. Is it ad-hoc, or is it a permanent agreement such as specific hours on specific days?

Best if you start off by operating PAYE, then if the tax office so informs you, then change to doing it differently. Your new nanny could discuss with the tax office, and if the tax office agrees to them being self-employed for your particular job, then I would expect the tax office to inform you of that.

When in doubt operate PAYE.

to be a childminder you MUST work from your own house, if you go to someone elses house, then you are a nanny

nannies can not be se if they work for a family longer than 6mths as then position turns into perm instead of temp

This all gets very messy, as it is possible to register as childminder but operate from a premises (has to be residential) different to your own home. In England, if a nanny cares for more than 2 families children at the same time, then they have to register as a childminder. Oh don't you just love UK legislation.

Lets try to keep this more simple, by establishing what job the person being called nanny is actually doing. It is the nature of the particular job that would be looked at, in my view, by HMRC. While someone may be self employed for some jobs, for others they may be employed. Thus I feel we need to establish what the job being done is.

This 6 month rule you mention... ever seen it written anywhere? I haven't come across it. I think it could be to do with 'regular' work... perhaps there is case law somewhere which helps define 'regular', maybe it was determined in a court to be 6 months. Alas can't search Case Law... calling any lawyers, anyone able to do that search?

You can't work the same days/hours consistantly and be SE.

As a MNurse i have varied jobs and days off so come under SE rules and can work for a family indefinately as long as these conditions apply.

But a SE NANNY is a different thing entirely especially for a single family unless doing differing hours like working for aircrew!

I recently spoke to HMRC re this 'supposed' 6 month / 26 weeks in 1 tax year rule to be told it doesn't exist as long as the rules for SE are aplicable hence my current MN job going from 11 weeks to 22 weeks and now into next tax year (April 2009)

There are not really any specific rules, it's more a case of building a picture and evaluating that.

Hall v Lorimer
?In order to decide whether a person carries on business on his own account it is necessary to consider many different aspects of that person?s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation. The details may also vary in importance from one situation to another.
The process involves painting a picture in each individual case.?

Note: I feel this case may be relevant, as the person was providing "personal skill", not equipment. A nanny provides personal skill, and typically does not provide equipment.

If anyone is interested, Case Law on Employment Status can be read at HMRC ESM7000

Have fun reading... if you find anything you feel is relevant, please do post it along with a link.

thanks for your replies- hoewver i am now more confused than ever! should i ring HMRC or would that be the last thing to do?

if she is going to be your perm nanny, and you decide the hours etc, then she is an employee and you will be an employer

so work out gross wage with her, and then work out the nett wage, you will pay her X amount nett and you will sort out the tax and ni on top of that and give her pay slips

No I wouldn't bother. If the lady in question believes that she is self-employed for the job you are offering, she can contact a status officer and have them confirm that they agree with her.

I don't see it being in your interest to have her as self-employed, from the limited info you have given. It would help if you explained more about the actual job - such as hours, days, if the lady can provide someone else to do the work, if the lady would be providing any equipment, what other jobs the lady has.

If she will be working for you on a regular basis - such as same day each week, several days each week, then I would suggest that you operate PAYE until told otherwise by HMRC.

Agree a Gross wage. Give her a P46 to complete (assuming she isn't giving you a P45), and based on the P46 you get the starting tax code. Then leave it with HMRC to sort out, between themselves and the nanny.
DO NOT AGREE A NET WAGE

thanks, i will look into this tomorrow morning when i am a bit fresher...

I would call the emplyers helpline and give them the details and then your prepared.

beforesunrise - in order to determine the tax status of your potential nanny you need to tell us about her Role. Will she work with you regularly with set hours that you define or does she come and go as she pleases determining her own hours?

iamananny - there is no 6 month rule at all

nannynick - no legal definition of "regular" as each case is considered on its own merits once before the court. Also the court wont judge just on "regularity" but a host of other factors like: i) taking responsibility for business success & failure ii) have several customers at the same time iii) you can decide when to work and where to work iv) can hire others to complete your work v) provide items to do your work etc.

NB. (in case someone doesn't read the whole post) this list is not exhaustive so I would definitely recommended getting hold of your local status inspector via your local tax office as nannynick has suggested.

xx

Hi there,
I want to find a nanny from August 2011 for my ds (3 1/2) and baby ( will be 8 months) for 2 days a week. Can anyone advise how much I will be looking to pay, whether nannies tend to have own cars and what to look out for? I live in Chalfonts. Thanks so much

this thread is over 2 years old and last reply has no revelence to the thread

but

salary depends on age and exp of nanny and your area - some have cars and happy to use them - others like me wont use their car

always discuss a gross salary esp as nanny will prob have another 2/3day job

if you can be flexible with your days it will help you find a nanny