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Nannies, second jobs and tax allowances

5 replies

snickersnack · 19/11/2009 22:17

Our nanny works for us 3 days a week. She's looking for another job, for one or two days a week. It's just occurred to me that I don't know what the implications of this are for what we pay her - obviously at the moment we benefit from her personal allowance, and her 10% band.

If she gets another job, would we share her tax allowance with the other family? It would be complicated - we do use a nanny tax service but it's very much no frills. Or do we, as her first and largest employer, keep all of that and the other family will pay tax on her salary at 22%?

I know this in theory isn't our problem as we pay her a gross salary, but though her salary in her contract is stated gross, she thinks in net terms, and we started with the net salary and worked it out in gross terms when we recruited her, so she definitely doesn't see what we pay her as a gross wage which she pays tax on - she sees it as a net wage which we top up with tax. That may not make a difference, but I'm feeling too stupid and addled after a long day at work to work it out for myself...

OP posts:
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argento · 19/11/2009 22:45

If you pay gross then it's no problem for you. It will be between her and any new employer whether they agree net or gross.

juneybean · 19/11/2009 22:48

She'll get taxed at 22% on her second job

nannynick · 19/11/2009 23:43

As you say, as you have agreed a gross salary, you will just make deductions as per what HMRC tell you to do. Your nanny can choose how they want their tax code allocated, HMRC will then decide if they will permit it or not. Personally I feel it's far easier having primary job (the one with the most income) being the one which has the tax allowance... any other work is then at BR.

Info about PAYE Coding Notices

Your nanny needs to wise up about how Tax works so that they understand that taking a second job will affect how much they earn take-home in that job.

I would suggest that you remind you nanny that they have agreed to a Gross salary and assuming their tax code does not change, then their take home pay will be roughly as it now... but if they take a second job and decide that they want to split the tax code (if HMRC permit it) then you will not be paying them any more than the Gross amount agreed.

Your nanny will need to ask any other employers for a P46 when starting the job. Your nanny needs to complete that form, I would suggest by selecting Box C - "I have another job or receive a state or occupational pension." That will then start them off on tax code: BR cumulative.

Information for Employers about form P46

snickersnack · 19/11/2009 23:56

Thankyou, nannynick - that's very useful and I will let her know all of that.

OP posts:
eastmidlandsnightnanny · 20/11/2009 15:20

she would be best to agree a gross wage in her new job based on it being taxed at 22% and what she is happy to recieve net after this then you keep her full tax allowance as normal

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