Would you believe a nanny who said that she paid her own tax and NI?

[Notsochilledanymore]

Just that really - nanny asking to be paid gross and is saying she will pay her own tax and NI. Sounds a bit suspicious to me, but am I just being paranoid? Is there a way of checking?

I have a friend who is se and works as a nanny for full time for only one family. So no problem at all.

bluegreen your friend CAN NOT work as a full time nanny to one family and be se

it is not legal - your friend is breaking the law and her emloyers could get a HUGE fine of £3000 and possibly even a jail sentence - so I personally would call this a problem

i take it your friend blue is not a uk citizen(sp) - hence why they think they are able to bend the tax rules

well sure her employers wont mind a huge fine if the IR catches up with them

maybe you should point your friends employer to this site and she can then call the IR and see what they say

I know the OP hasnt responded yet. The reason I asked her potential nanny`s nationality as it is possible for a nanny to be SE and pay her own tax, ni etc.( thats how the another country comes into this).

As i have mentioned, I dont know how they are doing it interms of tax issue, all I knwo is the nanny, use an accountant to sort her tax and she is employed like this for the past 2 years or so.

Im only responding OPs question like you. Because, you dont know that doesnt mean it does not exist.

Imananny, i dotn think she is bending any law or breaking any tax rules at all. She does use accountant and if it wasnt possible im sure her accountant would tell her. And it wouldnt last for 2 years. she is not a uk citizen hence she needs to do everything by law, if she wants to work here. So please dont mix 2 different issues here as i said because u dont knwo that doesnt mean it does not exist!

Notsochilled - you always pay nannies Gross, it's the gross figure in the contract. However, as an employer in the UK, you deduct your employees tax and NI contributions, resulting in the nannies take home pay (net pay).

Best to assume that any employee is an employee for tax purposes and operate PAYE. Then if the tax office contacts you with a revised tax code, or to tell you that you do not need to operate PAYE for some reason, that is up to the tax office to decide. If your nanny feels they should be SE for the job, they can contact their tax office, explain the situation and if the tax office agrees the tax office will contact you.
Don't take the word of an employee - wait for some kind of written confirmation from the tax office.

BlueGreen - what nationality is the person and are they working for a diplomat, or on Embassy premises?

from what I gathered when I was se temp nanny/mn, accountants know F**K all how the nanny system works,if they can/cant be se etc and as long as he got paid, he didnt care what he put on the tax form

I honestly think your friends employer needs to talk to IR (if she hasnt) before she gets a suprise call and ends up with a huge fine and then IF they say its ok for her to not pay her nannys tax and NI, as well as employers NI, then I will keep stum

asssuming that the OP nanny is a uk citizen, then no she cant be se

Im SURE you do

So what is this country with the special agreement then?

sorry Bluegreen, but either your friend's aren't telling you all the details or you're got the wrong end of the stick somewhere.

nannynick, she is from Turkey and the agreement i was talking about is "Ankara Agreement" and they can work in any kind of employment and that includes working as a nanny too.

imananny, i dont think u read proply what i have writing on here (obvious u havent) as i was talking about NON uk citizen whose country and england has agreement on this.And im sure everyone knows that you cant be se nanny unless you doing temp. work.

It seems you think! that you know everything but unfortunatelly you are wrong! jura and imananny

Ladymuck, all im saying this person works se nanny and use an accountance and fill the tax return forms etc. if it was agains law im sure hmrc would do something about it. as its been like this for the past 2 years or more. I dont understand why people think u cant i m giving you the example from a person and family who works like this for the past 2 years! so its not like i m making it up i m just saying it can cause people do! work like this. Anyway, i dont see the point explaining this to u guys anymore as i have said it if u dont want to belive then dont. Im not here to convince you guys. So no need to be funny.

But even under the Ankara agreement it would be hard for a nanny to meet the conditions whereby the employer didn't have to make deductions. She would have to be working for a Turkish employer whose principal place of business was in Turkey?

Sorry but can you spell out how your friend does it? I appreciate that you seem to know loads of people who do this, but it is very unusual and I'd still like to understand how exactly they are getting round the rules (HMRC will not give out this info!). I assume that your friend is a Turkish national? Presumably working for a Turkish national? Or would she be classified as an au pair?

I don't think we're doubting that it happens - we're doubting whether she's legally allowed to do it. It's entirely possible that Turkey does have some kind of special exemption from British employment legislation, although I doubt it and a quick skim through the Ankara Agreement doesn't detail anything about tax. It merely seems to talk about entry restrictions and leave to remain (summarised very well here)

As a cautionary tale I know a family wo employed a nanny (who is actually registered as a CM and self-employed as one) full-time on their premises to care for their children doing so in good faith (she paid her taxes and NI, used an accountant, showed proof of SE status as a CM and her tax returns) and then got stung by the Inland Revenue for back taxes etc of nearly £25k despite having paid the nanny a gross wage and her having paid taxes as a SE person and got a fine. If the IR think they're right then they really don't care whether someone's been doing everything by the book using the wrong book. They just see that it's the wrong book.

Oh and the branch that deals with NI is not the same branch that deals with income streams so it's entirely possible to file tax returns but them not notice for years that you're not actually self-employed. Plenty of people who aren't self-employed make voluntary additional NI contributions so it can take a while to catch up.

Also I don't know if you're aware LadyMuck but I think even APs earning over the threshold are supposed to pay tax and NI. Although that may just be EU nationals - I vaguely remember a conversation about it and Peekaboo's website says you do see here

I suspect that they may be bending the rules a bit - HRMC: UK/TURKEY DOUBLE TAXATION AGREEMENT is what I think being used to say that tax isn't payable in the UK. If I'm reading it right (which I may not be) to get around paying tax in the UK, they must somehow be claiming not to be classed as resident in the UK... is that right?

Anyway... back to Notsochilledanymore's OP, as long as your nanny isn't from Turkey, I feel you are safe to assume that you have to deduct Tax and NI on your employees behalf.

But from what BlueGreen says they are paying tax etc here, which is what confuses me.

Thanks Frannikan, I do know that but there was a recent case about the status of au pairs under the Ankara agreement so was wondering what the precise circs of BlueGreen's friend was.

Given the UK's self-assessment process a mere 2 years of filing tax returns wouldn't give me any certainty that the status had been accepted, and if the person has only been here for 2 years then they may have only filed one return by this stage.

This is fairly standard - why would it be dishonest?

All you have to do is ask to see her confirmation of her NI contributions which she would be paying weekly, monthly or quarterly.

A lot of nannies are registered as SE, partly becasue it makes more sense financialy and secondly becasue a lot of employers don't want to offer a contract or be responsible for making NI contributions.

There is no way that "this is fairly standard".

The vast majority of nannies working in the UK are employees. If that wasn't the case, I feel that there would not be such a great abundance of nanny payroll companies out there.

I don't think a self employed nanny would get in under this agreement. It is more for one legged roofers and other properly self employed people. And I think this rule applies - or did apply - to people from all pre-accession states. (But admit to knowledge of immigration and EU-ery being a bit woolly these days.)

Nanny has British passport and no Turkish background at all - and she's proposing to work FT for me 5 days a week but also does weekend work and night nanny work for other families. So she might meet the SE criteria or not?

To be honest, having now met her twice, I thought she wasn't that great anyway (can't cook, won't cook for children, couldn't give me an example of an activity that she might do if its raining and outdoor play wasn't an option (!), and claimed to be qualified but had lost her certificates in a house move so was unable to prove it), so issue is a bit moot, but an enlightening discussion anyway! Thanks guys

beautifully put jura, yes a nanny can be employed during the week and SE at weekends/proxy parenting/mn work for example - never said we know everything but we do know some things

notso - IF she did work for you 5days a week FT, then no she couldnt be se for you,you would be her employer

but

from what you said stay WELL away from her, she cant/wont cook&cant find her certicates