Do I have to pay tax on the income I give to Babysitters?

[Susan43]

Anyone have any ideas on the tax situation regarding having a babysitter care for your children in the evening?

Do you mean that you are self employed and want to offset your babysitting charges. In which case, no, you can't do this, childcare is not a tax deductable expense.

Or do you mean you have to pay employers tax and NI for a babysitter? Unlike nannies who have to be an employee I reckon you can safely regard a sitter as casual self employed unless they are working for you every night for most weeks of the year or something.

The latter of those, though the first option would be nice

If they are casual self employed, then should they pay tax on their income? In reality, does that actually happen?

their tax/ni situation isnt your responsibility. You could of course ask for a receipt but i doubt they will sit for you again. if you're worried about it why not go through an agency

Couldn't use an agency, they could send someone different each time, plus it is someone me and my children have never met. I prefer knowing that my children are cared for by someone I have verified is suitable, someone who builds a relationship with my children rather than being a one-off encounter.

Some national Agencies also state on their websites that their sitters are self employed - I don't feel that is right, surely they are employees of someone... most likely the agency.

Pay in cash. Forget the tax.

I'm pretty sure you can treat babysitters like aupairs - basically you're the employer, but you don't have to declare it to IR if they earn less than £70 a week (or so - you'll have to look up the threshold on the IR site). If the babysitter has another job they should declare the money though.

The sitters are unlikely to be employees unless it is a regular arrangement, eg my nanny babysits for someone every Friday and Saturday night - fixed hours, it is alwasy her etc.

Your sitter would be able to turn down a request to babysit, which an employee typically can't. They can also babysit for different familes at any time,without askign permission of other familes first etc, which drives it towards self-employment. I think that you are safe from being caught up in a PAYE scandal!

In terms of using agencies though, you may find a regular sitter wthrough a local agency. We use a local agency, and they have provided us with 3 sitters over a 5 year period (so the children always have someone they know regardless of how often we are out, and we always have a sitter available). Typically agencies and sitters are keen to build up regaular long-term relationships between sitters and families.

I don't think it does work like that, unless you have the same person come and sit for you every night, in which case she could be classified as your nanny.

But if she's ocassional here and there and she provides the same service to lots of others then she would be self employed and you can let her worry about whether she's going to get into trouble with IR. But, let's face it for the tax due on £20 or so per night, the IR has bigger fish to fry.

employees can turn down shifts and they can work flexibly too.

True, but typically not for months on end?! A babysitter never has to turn up again.