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Original poster

Does this count as working/do I need to declare it for tax?

42 replies

HopHopHopSplash · 26/06/2013 14:51

I have a 9 month old, and am not going back to work until she is 1, but a friend with an 8 month old is going back to work next week. I offered to look after him as she was really worried about leaving him with strangers, so we have agreed that for the 2 days a week I will take my DD to her house for the 8 hours and look after them both there. She said she will give me £50 per week as she doesn't want to feel she's taking advantage, and also knows I have been a bit tight on money (am a single mum)
Does this count as work or is it just babysitting as it's nothing formal?

OP posts:
AgentProvocateur · 26/06/2013 15:01

You should declare it, but unless your mat pay is exceptionally generous, you're unlikely to be liable for tax.

You will get loads of childminders MNers telling you that it's illegal to look after a child for money unless you're registered!

flowery · 26/06/2013 15:04

Sounds to me like you will be working as a nanny, 16 hours a week. The fact that you happen to be doing it for a friend doesn't affect that.

You don't need to declare it for tax purposes, she needs to do that, and employ you properly, paying NI contributions, and giving you payslips, paid holiday etc.

She also needs to pay you at least minimum wage.

Original poster
HopHopHopSplash · 26/06/2013 15:12

agent isn't there something about it being allowed if your in the child's house rather than 'childminding' at your house that makes it ok? Or have I imagined reading that?

OP posts:
maja00 · 26/06/2013 15:15

If you are looking after the children in her house it is nannying, not childminding. She should be paying you minimum wage though, that's a legal requirement.

If you are on maternity leave, it might affect that?

To be honest if you keep quiet about it and don't tell anyone you are being paid no one would find out.

Original poster
HopHopHopSplash · 26/06/2013 15:15

flowery what if she doesn't give me any money, is that allowed without holidays, NI so on ?

OP posts:
flowery · 26/06/2013 15:16

It is allowed in her house, yes. You don't have to be registered. But you'll be a nanny and must get minimum wage etc. Minimum wage is currently £6.19 if you are over 21, so for 16 hours childcare your friend should be paying you nearly double what she is proposing.

She may be concerned about leaving her child with strangers but the arrangement as she is suggesting it would also be saving her a considerable amount in childcare costs as two days nursery or childminder would cost more than that.

flowery · 26/06/2013 15:18

x-posts

Well if you do it on a completely voluntary basis that might be different, although voluntary workers also have some rights where there is a regular expectation and commitment.

Would you really want to do this for free though?!

maja00 · 26/06/2013 15:49

Realistically though, no one is going to investigate you. If you and your friend decide on an arrangement that works for you, keep the money in cash, and don't tell anyone you are being paid then it will be fine.

lougle · 26/06/2013 15:52

maja00 that is terrible advice.

maja00 · 26/06/2013 15:53

Why? What do you think will happen lougle?

Original poster
HopHopHopSplash · 26/06/2013 15:56

What would happen if it was investigated? Would there be penalties or would we just have to formalise it and make up some holiday leave etc?

OP posts:
78bunion · 26/06/2013 15:58

£25 for 8 hours is very very low pay. If you go to her house there is no registration or anything as it is being a nanny not a child minder. So the issue is whether your maternity leave allows it - most employment contracts say you cannot take a second job (read your contract and check). Secondly as said above you are not being paid the minimum wage. However I think it could probably be for expenses - petrol etc so I do not think you need to worry too much about the pay rate. Also it is £2600 a year if you do it for 52 weeks so is well under your single person allowance IF you have no other pay in that tax year. If you do have pay in that tax year then you should put it on your tax return and pay tax on it unless it is just for your expenses.

CinnabarRed · 26/06/2013 16:01

What if you had a car crash with her LO in the car and the LO was hurt? Are you insured?

Maybe you won't use your car - but surely you'll want/need to go out sometimes. What if you're pushing her LO in a buggy and the LO gets hit by a car. Are you insured?

Baby groups: who pays, you or her?

Food for the day: who pays, you or her?

Maybe you won't go out at all. What if you trip and break your leg in her house. Is she insured to cover your injury?

Your LO falls and cracks her head open in your friend's house - is your friend insured? How do you get your LO to A&E? Do you take your friend's LO with you?

I have known these, or similar, issues occur for nannies of my acquaintance.

NicknameIncomplete · 26/06/2013 16:03

Would the answer be the same if the OPs friend bought OPs weekly shopping as a thank you for looking after her child instead of cash?

Would u still have to declare it if no money is exchanging hands?

flowery · 26/06/2013 16:04

maja00 what could happen is the OP could end up getting diddled out of a significant amount of unpaid wages and holiday pay.

For the employer what could happen is a tribunal claim and trouble with HMRC.

And that's leaving aside all the examples CinnabarRed gives...

NicknameIncomplete · 26/06/2013 16:06

Cinnarbar my mum looks after my dd when i work. We dont discuss any of those things. How is this situation any different to mine?

maja00 · 26/06/2013 16:07

Hundreds if not thousands of people use informal arrangements with friends for babysitting with small amounts of money changing hands. I really don't think that HMRC have a Babysitting Investigations Unit to ensure everyone is paying tax.

If the OP is happy to do some childcare for a friend in exchange for a small amount of money, and neither are claiming it's employment or complaining about holiday pay or minimum wage, then talk of tribunals seems a little... far fetched.

LIZS · 26/06/2013 16:07

Any suggestion of "reward" over and above expenses effectively gives status of employee not volunteer so entitled to holiday pay, sick pay etc. I didn't think you could care for 2 under 1 without dispensation.

maja00 · 26/06/2013 16:10

Do you and your DC never go to friend's houses Cinnabar? Would you really sue a friend if you got injured at their house?

flowery · 26/06/2013 16:15

16 hours childcare is not "informal babysitting". Informal babysitting is for a few hours on a Saturday night occasionally or similar.

Plenty of people may take advantage of people willing to work as a nanny without giving them employment rights and the legal minimum pay, but that doesn't mean it's ok.

Talk of tribunals is not at all far-fetched. If the OP and her friend fall out, which isn't, you know, outside the realms of possibility when childcare for little money is being provided by a friend, the OP may quite rightly decide that actually she does want her employment rights, and no one could blame her.

flowery · 26/06/2013 16:17

I've dealt with countless situations where employees have said at the start of an arrangement that is technically illegal that they are fine with it, only to change their mind later on and it all end up going very pear-shaped for the employer.

maja00 · 26/06/2013 16:21

You're right - OP, if you're likely to sue/report your friend at a later date then best not enter into this arrangement.

Original poster
HopHopHopSplash · 26/06/2013 16:28

We have been close friends since we were children, so if it wasn't working well I would just say at that point. I definitely wouldn't ever sue or anything like that!!

Friend has said she will leave food ready to be warmed up, and going out he can go in the buggy and DD still goes in her sling quite often (she's very petite) but they have a garden so plan to mostly stay home.

OP posts:
garlicnutty · 26/06/2013 16:28

She's giving you £50 a week. This isn't a wage for employment, it's an informal exchange of favours. If you're going to be at her house two days a week, you'll be saving costs at home. Will you be eating your friend's food, maybe even using her washer & dryer?

I'd advise discussing all the details with her, so you both know what your expectations are. Then ring up HMRC to ask if you need to declare it. I suspect they'll say no, but rather safe than sorry!

LIZS · 26/06/2013 16:33

but the regularity and duration of the arrangement make it an employment , regardless of the rate of pay. It isn't the odd hour to cover until friend gets home from work or an emergency.