calling employment experts - is there any way a nanny can be self employed?

[bossykate]

hello everyone

i'm currently looking for an after school/holiday nanny to start in september. there is one candidate who is ideal, works in a school, current CRB, driver, outstanding refs from previous families. she is head and shoulders above other candidates i've seen so far.

the only wrinkle is she wants to be paid cash in hand. i'm uncomfortable about this - i want everything to be above board. i can't afford to gross up the pay so that she gets the amount she wants net, iyswim.

given that she has a number of jobs and her daughter (who is also a qualified nanny) could substitute for her if need be is there a way of structuring the t&c/contract so that it stands up as self-employment?

i have looked at HMRC Leaflet IR 56 (Employed or Self Employed?) which from the title you'd think could answer the question (lol! ) but i think it is a borderline case.

any advice very much appreciated.

thanks in advance

actually, soapbox, i'd be really grateful for your input on my other thread

thank you

What a shame!

I had several people apply for what I thought was an almost impossible fit 2!!!!

My fried also struck lucky with a part time nanny for her baby twins, within a week or so!

Have you still got some editions to go before your sub runs out, maybe when the school holidays finish some nannies will be reassessing their options!

Hope you find what you are looking for

update just in case anyone couldn't bear the suspense...

saw the nanny today. she was marvellous with the kids - in fact ds said she was "supernice" later on. confirmed all my first impressions at the interview which were subsequently corroborated by references.

had a conversation with her about the cash in hand business. basically, what it boiled down to was she wanted to earn £X in hand and wasn't bothered about whether that was as an employee, self employed or cash in hand. the gross rate that would deliver the amount she wants net is simply beyond my means, and as i said, i don't want to pay cash in hand. so that only leaves the self employment option.

so i rather wearily phoned the ir helpline (as recommended on this thread) and spoke to a rather harassed and impatient ir adviser.

basically, he told me nannies could be self employed, if she says she's self employed there's nothing further i need to do. he initially thought i was talking about a childminder so i did set him completely straight and said it was definitely a nanny position. his whole attitude seemed to be "so what's the problem?" it was a very brief conversation and he didn't ask me any of the key determinant questions for employment v. self employment.

can i take this at face value? should i get a letter from her saying she's self employed? should i get further advice - aaaarrrgggh!!!

believe me i wouldn't be bothering if she wasn't a very good candidate indeed....

i would be very grateful for any advice/opinions. thank you

I would get a second opinion from IR as i spoke to one "advisor" who told me i couldn't split my tax code down the middle but yetmy employer rang up and was told i could! So as far as i can tell it depends who you speak to

If she is self employed she will have documentation to that effect, photocopy it and keep it safe.

Draw up a contract stating you are paying her £xx per week and it is her duty to pay tax & NI on it.

If she has other jobs she could be declaring [or not] your job as secondary employment.

Always get something in writing bk when it may be contentious in the future.

You can email "them"

bk, whenever I work anywhere on a self employed basis (usually local authorities or universities who presumably are straight on the legal side...), they make me fill out a form which I have to attach to each invoice.

It has on it: name, address, NI number, tax office name and address, unique tax reference, description of work. I have been told that they ring my tax office and ask if they can pay me for that job without taking tax off (no idea if they ring each time or just the first one).

I presume filing this level of info would be enough to protect yourself. If she doesn't have a unique tax reference, she hasn't officially notified the IR that she is self employed.

BK, sorry that your predicament continues!

A couple of thoughts first:

I'm assuming that you are happy with your calculations on what she will cost you - as she isn't full time, you should obviously be able to pay around £90 per week free of tax and NI, so the per hour mark-up is less than if she was full-time (if you follow that!). I'm guessing that you're clear on this, but thought I'd mention it for completeness sake!

Her comment that she wants £X in hand bothers me a little - she does realise that if she is self-employed she has to declare it and pay tax and class 2 and 4 NI on it? Or is it assumed that you would still gross up (though only for tax, not for NI). I guess her comment bothers me slightly as it might indicate that she isn't yet registered as self-employed, or that her other job (IIRC she has another job?) is cash in hand.

Which helpline did you ring? The New Employers Helpline is 0845 6070143. It might be worth double-checking with them.

I glad to hear that you think that she is worth pursuing! And presumably it simplifies the school/nursery pick-up dilemna.

The Chartered Institue of Taxation has a directory of members - you could look for a UK Personal Tax specialist near your postcode. However I have to warn you that the register seems to include people who are barristers or are in industry rather then practice, but so long as you're not right in the City you should get someone in practice. If you feel that she is the right nanny then I'm pretty sure you sould be able to get a suitable contract worded (though it will place some reliance on her ability to provide a substitute). I was just hoping that you didn't have to fork out the advisers fees.

The cash in hand bit bothers me too. It definately sounds to me like she isn't planning on declaring this money at all which is ultra dodgy.

When getting any advise from IR get a name and reference. Better still in writing I think a second opinion may give a different answer.

This could all come round to bite you on the bum!

Sorry for jumping in so late in the conversation. But let me get this straight. You called the IR, who confirmed that a nanny can be self employed.... really? Then why do any of us take on being emplloyers? Sorry, but I must wonder if this IR employee has his facts straight.

According to this Inland Revenue leaflet:

IR56 Employed or Self-Employed? , a nanny would have to answer "yes" to far too many of the Employee questions to stand a chance of being self-employed. It's simply too directed a job. It doesn't matter if she has other jobs as well. Each one is considered on their own merit.

But that is the point here Ameriscot, "Each is considered on their own merit." Not all nanny positions are the same, and the legislation does not apply equal weight to each question.

I have a part-time nanny who is most definitely self-employed. The circumstances are probably fairly unique, and would not suit most parents/nannies (there are no set hours on either side). But, because of our circumstances, she is self-employed. If in BK's case the nanny can (and does) send a substitute when she wishes, that is also a fairly unique circumstance.

FWIW, and as I've indicated in previosul messages, I think that there is little doubt that a fulltime permanent nanny is an employee, and that many, if not most, part-time nannies are also employees. But not all nannies are employees.