Is this legal?

[ohIdoliketobebesidethe]

We have decided to get an au pair when I start back at work. A friend has just approached me to ask if we would consider employing her nanny. She presently works in the day for my friend and is a housekeeper for her elderly relatives in the mornings and evenings. She was living in but due to a sudden deterioration in health they have sacked her to get nursing care in instead. She is therefore going to be losing half her present income and her accommodation.

We would be delighted to have her work for us but were planning to pay her au pair pocket money of £90 (inc £15 worth of travel card). She is 44 so does not fit into the au pair definition. However between me and my friend her total salary will be £340 a week so in line with a live in nanny's salary. My friend is going to pay NI and tax on her contribution so that she can sponsor her for a visa. I was not planning on doing that.

In September we would hope she could do more hours for us and I would increase her pay and presumably then would have to pay tax and NI.

So, do you think that's all above board?

Thank you wise mumsnetters.

There are a variety of red lights here for me.

1. "due to a sudden deterioration in health they have sacked her to get nursing care in instead"

This sounds a bit... well... alarming. Or do you mean they made her redundant and gave her whatever to required notice period / pay is.

1. I'm not sure if she will be living in your house, but if she is live-out there is no minimum wage exemption. However, I am not sure how this works with a share. Perhaps the two employers together must make up minimum wage (which admittedly isn't very much but something you need to consider)

1. If your friend is going to sponsor her for a work visa, and you then pay her separately as she is also employed by you, then I would recommend checking if her work visa actually entitles her to work for you or just for your friend.

1. If your friend hires her legally (i.e. on the books and pays the tax) then she wiil have taken said employees tax allowance and your money will not only be taxed, but it will be taxed at a higher rate.

Where is this girl from and what kind of visa are we talking about. Is she here legally now? If so who sponsored that visa, what are it's conditions, and when does it expire?

Now, once you get past the legalities of hiring this woman, we can talk about the ins and outs of nanny shares.

Thank you so much for replying - I can see your advice is going to be invaluable.

1. I was wrong to say sacked. She is working out her notice period now and I think it's all kosher.

1. She would be living in with us. Have just done quick sums and we would be paying her minimum wage (just).

1. I need to investigate this. She is Phillipino (which I know is controversial in itself)

She had been sponsored by the elderly relies and has worked for then for a few years. Her visa is up for renewal in March.

1. I was hoping to avoid tax initially by calling it au pair's pocket money. Are au pairs banned from earning extra?

1. The benefits of this arrangement for us is that she is a trusted and respected nanny (as opposed to inexp teenager au pair) and she is likely to stick around for some time if we can make this work. My friend is self-employed and was planning to hire her from 10am - 5pm but can change to 9.30am-4.30pm which fits in perfectly with when we need her. In Sept my eldest starts school and her dc starts afternoon nursery - so that also seems to fit perfectly. I know this friend well enough to be frank with her if there was a problem.

Thanks AtheneNoctua

If she is earning above £100-ish then she has to declare ALL her earnings, so you will be liable for a proportion of tax and NI. You might want to have a stab at avoiding this but beware that YOU are responsible for paying her tax, not her, so if anyone shops you, you get the fine and backpay to cover.

The biggest problem though is going to be the visa, because the rules have changed and she now needs to qualify on a points-type system. Your friend needs to investigate this for her (regardless of whether you take her on or not). If she isn't a qualified nurse she may have trouble (although they nay have exceptions for people who are already in the UK - I don't know). A good place to talk to someone about all of this is the fillipino centre - I am sure they will have been looking very heavily into the visa implications for fillipina staff.

FWIW I would love to be able to do something like this - my mum was a nurse and we know a number of filipina nurses, and I know they are generally extremely hard-working, discreet, loyal and so on (generalisations I know)

Squiffy - I agree with all your generalisations and really like this women. If we don't do this for her she is going to find herself in a difficult position - but the more I look into it the more obstacles there seem to be.

I think the first hurdle is the immigration issue. Their current visa may be tied to their employment. They may be on a 'domestic worker' visa. If they then took a job as an au-pair, then I think that would fall under the new Tier 5 rules (which does not include the Philippines). It would advisable to get some expert advise on the immigration rules. You could try asking the Immigration Enquiry line: 0870 606 7766

The money you would be paying your aupair would be both taxable and NIable. I would most earnestly advise you not to go down the fiddling route because all other considerations apart, you are quite likely to get caught as in this case (VISA applications, addresses etc) there is far too much of a trail straight to your door.

Thank you very much indeed for your advice. It all seems to be much more complicated than we anticipated and I think we will bow graciously out of this arrangement and try something more straight forward.

I completely understand where you are coming from, but personally I think it is a shame to be bowing out - why not call the fillipina centre I linked you to below, and ask their advice? I think a couple of hours between you and your friend (talking to the various help lines) might make the difference between this lady keeping a whole extended family fed & educated, and her returning home to nothing.

The visa rules make me quite angry because I don't think many people appreciate the depths of poverty in some parts of the world; over here we forget how lucky we are. It makes me mad that the government has introduced all of this in order to add another layer of protectionism for the EU.

Sorry, am getting into a political rant here, not meaning to have a go at you, fellow MNer... (just this rubbish govt)

In terms of the tax & NI, they will add another 28% (appx) on top of the 'net' amount that you pay - you may want to negotiate with the nanny regarding this to see if you can share the burden - in any normal job she would pay more than half of this as it is her tax liability - so you migh tbe able to compromise on the money front and do it all above board. If you decided to go ahead with this leady, I could send you an excel sheets with all the calculations on it so you would know what to pay taxman every 3 months (by internet). And I am sure that the Fililpina centre will have very good knowledge and advice on the visa front (in fact it would be good for you to put the nanny in touch with them anyway, regardless of what you decide).

But yes, I appreciate that this is all quite a faff, so good luck in sorting out your needs, whatever you decide to do..

Where do you live, by the way?

Thanks Squiffy for your thoughtful post.

She came round last night to meet the kids and see the place. In the end she said she wanted more money -so I'm assuming she has other plans. She then asked if her daughter could do it instead. Her daughter is coming on a student visa which allows 20 hours work which is exactly the amount we want. I'm just going to have to keep my fingers crossed that she gets the visa, but we have a little time to play with as we want her to start in mid-Jan.