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Paid childcare

Discuss everything related to paid childcare here, including childminders, nannies, nurseries and au pairs.

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Original poster

PT nanny starting with another family and they want to share tax costs...

29 replies

nonuniform · 26/01/2009 20:47

So, my lovely nanny who looks after my kids after school was just working for me for £90 weekly.
I didn't need to pay tax on that, and the NI was covered by the tax office.

She has just started with another family and they have suggested that we all pay through a nanny tax agency and I think this means that we now "share " the tax burden between us.

As far s I can see now i will have to pay out more from my pocket as nanny will still get the £90 from me, but now if here total earnings go over £110 (i think it is) we will be liable for tax and NI and they expectt hat I will share that with them.

Am I being a bit mad or is this a bit bloody rich of them?

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theresonlyme · 26/01/2009 20:49

It is a bit rich and if you don't want to do it, don't.

tankie · 26/01/2009 20:50

Do you pay employers NI on the £90?

Original poster

nonuniform · 26/01/2009 20:54

No, the amount is too low, the tax office cover the NI.
So i decalre what I've paid her, but there are no extra costs to me other than the £90/ week.

She will now start earnign more with the other family and I suppose they will end up paying tax as now her earnigns are above £90.

OP posts:

tankie · 26/01/2009 20:58

I'm not sure how tax works - nannynick is good at this kind of thing! But if her earnings increase, wouldn't her tax code change so she does pay tax on everything?

Eddas · 26/01/2009 21:11

There's no need to change, because it shouldn't make any difference to the other people, providing they are paying her a gross figure (and you are). NI is worked out per employer, tax is cumulative over all earnings. It means the nanny will suffer alot of tax on her 2nd income.

You could split the tax between you, but there'd be little point. But even if you did it wouldn't effect(or is that affect) what you pay overall, you'd just end up paying her a bit less and the remainder to HMRC

Original poster

nonuniform · 26/01/2009 21:12

but if she needs £90 from me a week- ie her agreed take home pay, how can it be that i pay her any less?
who makes it up to her?

OP posts:

tankie · 26/01/2009 21:13

Eddas - does that mean there's a difference if they wage was agreed net or gross?

tankie · 26/01/2009 21:18

If you agreed a net wage I guess you have to make up the difference.

Original poster

nonuniform · 26/01/2009 21:19

The wage I agreed was £90 after tax.
It turned out that I didn't need to make a tax contribution as it was below the threshold.
Now she is working for these new people too- and fair enough, i can't get her to be exclusive on £90 a week, it seems that their pay will take her over the threshold and they are expecting me to contribute.

So I will now go from paying n £90 a week to paying £90 plus a figure for tax and NI based on what we all pay her collectively.
Oh, and I suppose a part of the fee to the nany tax agency,

OP posts:

Eddas · 26/01/2009 21:19

that's what i mean, it has no effect if you pay her gross, which is what you should do, as then if tax changes etc then you will pay the extra tax. It will have an effect if the £90 is net not gross.

tankie, the only difference is things like tax changes. If you pay a gross wage the employee would get less net pay (assume tax goes up) whereas if you agree a net wage you still pay the employee the same and you effectively give them more in terms of gross pay, so you would suffer the increased tax.

Nannynick always says agree a GROSS wage and I have to say I very much agree!!

Original poster

nonuniform · 26/01/2009 21:22

But the gross wage IS £90
How can it be any different when she started with me?

How much tax i pay depends on her other income which she didn't have when she started.

Soo, net or gross, it is still £90 unless she works for somebody else.

OP posts:

hatwoman · 26/01/2009 21:23

if you agreed £90 as a net wage, and you agree to split the tax allowance with the new family, then yes, you will be liable for some tax, on top of the £90 you pay to her. (which is why it's never a good idea to agree a net wage - it means you take the risk of any changes to her tax status) However you aren't under any obligation to split the tax free allowance with a new employer. having said that, if you don;t agree to it (with this or any other family) then you will make it very difficult for her to find a second job (as any new employer will have no tax free allowance and will get clobbered for all her tax). presumably, she wants/needs another job - so you may well find that she starts to look for anotehr job entirely that gives her the number of hours/pay that she needs. so think carefully before you say no. probably be good to talk to her and discuss what she needs in terms of total income and how she can get it while staying with you.

tankie · 26/01/2009 21:24

My current nanny job is the first one I've ever agreed a gross wage Nannynick's advice must be changing the industry!

frannikin · 26/01/2009 21:24

If you pay her £90 gross this has hitherto been her take home pay, but now she is choosing to take on extra employment. You will still pay her £90 gross. If you agreed net and you split her tax code you will end up paying more.

What's in your contract? Net or gross? If there's nothing it means it's gross. If you don't have a contract, write one now putting in gross (and I'll forgive you for not having one in the first place!).

Eddas: affect - if something has an effect on something else it affects it.

Eddas · 26/01/2009 21:25

nouniform, the NI won't be affected. NI is per job, so you could have 5 jobs all paying £90 per week and not pay any NI. But the tax would be based on 5x£90. Normally it is the first employer that uses the 'tax free' bit. I wouldn't budge if I were you,because you are paying a net figure. Tell them you are the first employer and will remain doing what you are doing.

What I mean by they won't be affected is that as long as they have agree a GROSS figure it will matter if they pay all the tax. eg

Gross wage £200
Tax lets say £20
Net pay £180

So the employer pays in total £200

Lets say the tax is split so they get a bit of tax free allowance

Gross wage £200
Tax lets say £10
Net pay £190

so the total the employer pays is £200

It makes no difference

But it does if you agree a NET pay;

Gross wage £200
Tax lets say £20
Net pay £180

So the employer pays in total £200

Lets say the tax is split so they get a bit of tax free allowance

Gross wage £190
Tax lets say £10
Net pay £180 - still remains the same

so the total the employer pays is £190

do you see what I mean?

As I say this is only for TAX not NI

Original poster

nonuniform · 26/01/2009 21:25

How could i have agreed a gross wage when it is the same as the net one?

And why oh fucking why do i always get caught out?

I was so lovely to them all.
I am covering mat leave and my hours are going to change for about 6 weeks and i'll go full time then back to part time.
She is jsut about to start with this new family, on a day that i am working now, but won't be later. So i've agreed to find somebody else for the one afternoon for the 6 weeks so she can settle in with the new family at a time they want her too.

grrrrrr
grrrrrr

OP posts:

Eddas · 26/01/2009 21:26

frannikin thanks but it's one of those things that'll never sink in no matter how many times i'm told

I don't do words, I do numbers

frannikin · 26/01/2009 21:33

You can have a agreed a gross wage. When you agreed with your nanny what did you agree? Did you just say "I'm paying you £x/hour" and no-one said whether it was net or gross? Because if you didn't say then by default you've agreed gross unless it's under minimum wafe. It's only net if it's specified.

Eddas: I can't add to save my life.

Original poster

nonuniform · 26/01/2009 21:35

Oh, I took her on a temp contract before xmas as i am working on a zero hours contract
which means my employer has no comittements twoards me wrt offering me regular work.

So I was going to work just until xmas eve, but now my work has been extended as somebody else is going on mat leave.

There is a gap of 6 weeks between the first and second mat leave cover, however.

But apprently the law states that i can't employ a nanny on the smae sort of contract that i am employed on.
So if i'm not working i still have to pay her if i want to keep her for when i am given more work.

It makes sense, but flipping hell it's hard.
I could either make her redundant for 6 weeks, and then ask her back.
Or just keep paying her the money and working out how the feck i'm going to find temp part time work the same hours as i'm doing. or go full time temp for 6 weeks....
oh, but i can't becuase she has got herslef another job....
which is all completely understandable and legitimate and i wish her well etc.

But it's doing my fecking head in as i'm the one trying to get a temp job and trying to fill the gaps that are left now she has taken on some more work.

Oh, and a,so now being asked to pay the extra tax etc.

see, I'm getting wound up- it'snot good for me!

OP posts:

tankie · 26/01/2009 21:38

So did you agree net or gross nonuniform?

frannikin · 26/01/2009 21:39

breathe
do you like this nanny enough to keep her on?
do you think she would accept being laid off for 6 weeks, especially as she's settling in with a new family and you get a temp in?
continue breathing
what does you contract with your nanny say? is she still on a temp contract?

I'm not trying to be patronising, btw. It's a really complex situation and I'm confused!

Original poster

nonuniform · 26/01/2009 21:45

Well the agreement is she gets the £90 after tax, so it is net.

And we are sorting out a new contract with stuff like holiday pay and sick pay etc this week.

The new family are for 1 day only.
She looks after my kids after school.
and she is bloody fab!

And it's not her fault that my work is not able to provide me work for 6 weeks.

I can't get away with not working anyway, so I do ave to fnd something else temp.

Because it is someboady's mat levae they don't have to say what theya re doing until 1 month prior to the day they retuen, so it's all up in the air for me anyway.
I'm find it terribly upsetting and this bloody tax thingy is the final straw tonight.
I should be finalising her contract and sending my CV out to angencies.
But I still don't know what to do re money or the extra hours and I can't say I'm available full time expct thrusday PM... life jsut isn't like that

OP posts:

lucysmum · 26/01/2009 21:46

I pay my nanny £91 weekly net and pay tax on her behalf based on the tax code the tax office told me to use - 20% flat rate - so it actually costs me 25% more than that. Dont think I pay any NI as although she is above the earnings limit the contributions are nil. Nothing to do with any other employer she has. As an aside - I was amazed to find out she is entitled to two lots of SMP because she has two jobs which are treated separately for NI purposes.

nannynick · 26/01/2009 23:18

So you have agreed in the contract that your employee gets £90 per week after tax deductions.

I am not aware of any law that prohibits a zero hour contract. I've certainly had a zero hour contract in the past when I did nursery temp work. Can you link to the legislation where you saw about zero hour contracts?

No reason for you to have any contact with the other family whatsoever. Unless your nanny is caring for both sets of children at the same time, it isn't a nanny share in my view. It is two independent employments.

I believe that the nanny could ask for a tax code split if they so wished, assuming HMRC agree to do it.

As you are writing her a new contract, what Gross wage will you use for that?

What payroll forms are you currently completing for HMRC? Such as a P11 (PAYE) or P12 (Simplifed PAYE)? Or are you currently not having to do any of those forms?

My guess is that you could use Simplifed PAYE, as you will be paying below the limit of £160 (that's Gross) per week.

Do you pay them weekly or monthly?

Original poster

nonuniform · 26/01/2009 23:55

As a domestic employee doesn't it work differently vs a nursery worker?
I just thought there was only one way to employ a nanny- ie the contract/set number of hours etc.
snd mat pay/sick pay etc.

not sure if she'll want to do the zero hours thing either.

Am supposed to have a P12 but have been asking tax office for it for 6 weeks and hthey aren't being very helpful

thanks BTW

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