Our nanny has suggested we only declare 50% of her hours for tax purposes WWYD?

[artichokes]

Me again.

We have just chosen a new sole charge nanny for our daughters. This will be the first time we have been sole employers of a nanny (previously we have been teh second family in a share).

We have yet to agree a contract with the nanny who starts in a few weeks. She will be working a 41 hour week for a net payment of £10 an hour. She has suggested we might only declare 20 hours a week for tax and NI purposes. This would save us approx £70 a week. The reason she came-up with this idea is she wanted to take the girls to various local music and dance classes which are expensive. I said I was not sure we would be able to afford these classes and she suggested the tax solution. In her opinion it would not harm her as long as some tax is being paid in her name.

What do people think of this suggestion? Obivouly we are tempted as the girls would love to attend the classes.

Agree wouldn't pay £10/hr net, have found agancies overinflate salaries and (funnily enough) don't use the differential I would for qualies/experience.

I also agree it would be a trust issue for me too, I 'need' to do everything above board (hence I have no nanny )

I would never, ever evade tax.

It's just not worth it, you'd have to pay what you owe and then some, and I'd simply die of humiliation.

TBH if a new nanny suggested this to me I would be wondering if I had hired the right person.

I cannot think of any reason in it for her to suggest this, other than to ensure that - should your relationship turn sour - she has a potential hold over you. Either that, or in 6 months time she will turn round and demand you 'split the difference' of what you save.

I am sure plenty of people do it, but for the nanny herself to suggest it just smells V fishy to me. And if she is willing to be dishonest with the revenue, who else is she going to be dishonest with? You?

Or, she just wanted to help the OP out in saving some money?

Or, she wants to go to the music classes so she can have a break and have a place to meet up with people.

I guess the advantage for the nanny is that she does get to split the difference in the initial job offer. So, the employer says I have x to spend on you. I can give it to IR or I can give it to you. So if nanny signs up to tax evasion she gets a bit more money (but less proof of income). But, squiffy makes a good point. Why would the nanny suggest this after she has already negotiated her salary.

I would find a nanny to work for less than £10nett (and I'm sure I could) and then have a bit of money left over for dance. I can't see paying the nanny so much that my kids activities/education/development/social life suffers for it. Although we are rather committed to the whole dance thing in my house -- much to my DD's disgust.

It is usually employers who suggest this. It doesn't benefit the nanny so why should she? Hmm .

I've been in situations where i've found a really nice family but they just can't afford me or are surprised about expense of nannies etc. and i've wanted to offer them less cos didn't want them to resent having nanny cos of cost but not willing myself to take a cut in salary. Silly and wrong i know and in the past.

I've also had friend (really- not me!) who had to fill in tax declaration form form and IR got a HUGE amount back.

When you actually get that form specifically checking salary and sit down with it and have to fill in details and sign to say its accurate, not misleading, false etc. and hope your nanny lies the same and is comfortable enough to do so too at the time, you might wish you'd played by the rules.

depends where you are in london but 8net seems to be absolute minimum and 12 net is totally poss. ime.