can a nanny pay her own taxes?

[chandellina]

I am looking for a nanny (in East Dulwich/Peckham Rye, in case anyone has any leads), and thought I was getting the hang of how the gross vs. net pay works, benefits paid, etc.

However, I've heard from a nanny who says she pays her taxes and NI out of a net wage. I thought that wasn't possible and I wouldn't want to set myself up for trouble.

anyone know anything about this?

Only if she is registered as self employed and she is the one contracting herself out to you.

If however you are employing her you must pay tax and ni

Best case scenario is that she does do this (why would she though?), but she shouldn't because she isn't self-employed. She may misunderstand the criteria the tax-office set for being self-employed, unless she is a temp nanny or can set her own hours with your or has the ability to send someone else to do her job in her place then she will be your employee and you will be responsible for PAYE. If she gets it wrong then the tax man will come after you because you are the employer and therefore responsible.

Most likely scenario is that she doesn't intend to pay tax or intends to under-declare her taxes. You would be in huge trouble if the tax office found out. Plus you would be employing someone who is beginning her professional relationship with you by lying to you, who knows what else she would lie to you about.

yeah, i can't help but think it's dodgy and that she just doesn't declare her income.

If they will be working for you on a regular basis then its most likely to fall under Employed status.
Status as I understand it is determined for each job, so quite possible for them to be Self Employed for some work and Employed for other work.
Operate PAYE, agree a Gross salary. If tax office want you to do something different, I expect they would let you know.

some nannies are self employed. I am one of them - but I only work on a temp or ad hoc basis for several different families over the course of a year.

I would be more than happy to show my tax returns to the families that I work for if they weren't happy with "just" a contract that states that I am self employed.

Maybe pay her directly into her bank and ask her to sign a receipt that says that she is SE and responsible for her own tax and NI.

Make her aware that she then isn't entitled to sick pay, holiday pay, maternity benefits etc.

thanks, good to know