Being an employer and doing all the tax stuff terrifies me, help!

[alysonpeaches]

I have shortlisted my nannies and Im about to start interviewing on Monday. TBH being an employer and doing all the tax and NI stuff terrifies me. I am going to get an agency to do the tax stuff, but Im still rather worried about taking the plunge and employing someone. Im also worried it will cost more than I think.

You know if you claim back tax credits for childcare with an Ofsted reg person, do you put your childcare costs down as the nanny's net pay or gross pay or gross pay plus payroll costs? Holidays are worrying me too. I know that a nanny is the best solution to our problems, but I am so overwhelmed I dont think I can do it.

Help!

For tax credits, you use the Gross Pay including Employers NI I believe. At least, you do if you are using Direct Payments... so expect Tax Credits may be similar.
So I would say use Gross Pay plus Payroll Costs.

I don't know any nannies who work for someone claiming Tax Credits though... I asked the question on here a little while back and no one knew of a nanny working for someone who paid using tax credits. So you could be our first Mumsnetter to pay their nanny using tax credits - so I'm sure many of us will want to be kept updated with how you find it works.

Have you read WTC5? That may help with tax credits related queries.

Why are Holidays worrying you? Is it that you need to pay your nanny while they are on holiday? If so, this isn't really any different to other forms of childcare... for example most nurseries would require you to pay for a childcare place, even at times you don't use it. Childminders may want full-pay, or half-pay, or some other arrangement.

Are you able to get 80% of your childcare costs paid? If so, are you aware that you don't actually get 80% of your childcare costs paid?

Confused... see page 7 of WTC5 for details of the maximum weekly limits.
With one child, the maximum weekly limit (at time of writing this) is £175. If you get 80%, then that is £175 x 80% which is £140.
If you have 2 or more children, the limit is £300. £300 x 80% is £240

On the same page it also says about what costs can be claimed:
~~ Begin Quote ~~
If you employ someone as an approved home childcare provider, you can claim for up to 80% of the gross costs of employing that
person as long as this is within the limits above. You should include:
~ the costs of any employer's National Insurance contributions you pay
~ the costs of any benefits in kind you give and
~ any other costs associated with employing that person.
~~ End Quote ~~

Thanks. WTC5 helped. I already get nursery fees paid so I know a bit how it works, and the cost will be below £300.

I dont suppose holidays are a big deal really. What I was thinking was the nanny will want different holidays to us probably. We only get 2 weeks holiday from our nursery anyway and the rest we pay for.

QUOTEI don't know any nannies who work for someone claiming Tax Credits though... I asked the question on here a little while back and no one knew of a nanny working for someone who paid using tax credits. So you could be our first Mumsnetter to pay their nanny using tax credits - so I'm sure many of us will want to be kept updated with how you find it works. UNQUOTE

Feel like a right old charity case!

Good to hear that WTC5 helped.

You aren't a charity case... you're unique - at least amongst mumsnetters, so it seems. Thus you will be able to tell me how the tax credits side works. Many nannies are used to Childcare Vouchers, very few though have experience of parents paying via Tax Credits... so the more info that can be gathered, the better for both parents and nannies.

Well I guess there isnt a lot to it, its just the same as paying a nursery. I get the childcare providers OFSTED number. I ring tax credits and say my child care costs are xxx a week. They pay me weekly, I pay the childcare provider.

re holidays - you're the employer, and so you do get some say over when your Nanny takes holiday. We always gave our Nanny Bank Holidays, plus 2 weeks of her choice, and 2 weeks of ours...

Would I be right in thinking that the current tax credits system assumes that childcare providers are paid after they have provided the actual childcare? With a nanny you tend to pay in arrears, so I can see how it could work. With a Childminder, many now want payment in advance. Nurseries - I'm not sure... I expect some may still do it in arrears and some want a month in advance.
Anyway, just wondered how it would work if say the childcare provider needed paying before the care was actually provided (it's a problem under the Childcare Voucher scheme, resolved by parents paying in full the first month).