How to broach the subject of childcare with MIL?

[ElleDubloo]

I have a brilliant MIL who I get on with swimmingly. She's delighted I'm pregnant and really excited about having her first grandchild. We live 25 mins away from her (we're actually currently living at her house, because we're having work done to our bathroom). We might move in with her more permanently when I'm due, to have her help with the baby in the early days.

I'd like to broach the subject of childcare, but I'm not sure how to do it sensitively, and without looking like I'm taking advantage of her. TBH, I'd like to take 6 months maternity leave and then return to work full-time, and it would be amazing if she would volunteer to take on all the childcare after that. It's a big ask. She has a part-time job as a teacher, which she has hinted that she doesn't enjoy very much.

Is it reasonable for me to ask her whether she'd like to quit her job so that I can go back to work?
How should we recompense her for the loss of earnings? Could we offer to pay her (because we'd rather pay her than pay a childminder we don't know) but would she take offense?

Would be great to get everyone's thoughts on this :)

Glad you've made progress.

Do you know if she's agreed to late nights as well or just 9-5 care?

Do post on the nanny board for advice about PAYE etc.

2 grand a month!! Bloody hell. Good luck my MIL had my beautiful child while I went back to full time work and it was the beginning of the end of a lovely friendship. Cant really stand eaxh other now and no she doesnt have my daughter any more

Nights and weekends included. Obviously she gets a break when either of us have time off work.

Jelly - it's a bit less than my salary and it means my husband and I don't have to worry about working late or getting enough sleep during the night. It sounds like a lot, but if she spends £400 a week on a 9-5 nanny, there's not that much left for herself. Sorry things didn't work out with your MIL, that must have been really hard.

Elle - bare in mind you will need to be a nannies employer. So £400 for nanny will be more to you as you will need to pay tax and employers ni etc on top. So £400 to nanny at a guess is around £600 to employer a week

I think it sounds like "not much" rather than "a lot"!

The general guide on here is nanny salaries in London are £10+ ph gross, I believe.

Oh didn't spot that she might hire a nanny to help her. Then she'd be an employer too??

OK well, she's family, and currently she's happy to do it for no money at all. If she needs more later on we can reconsider.

Also, FIL will be retiring in the next year, and apparently he's keen to help.

If you are paying her you need to employ her as your nanny (if in your house) or pay her as a childminder (in her house) - for which I think she needs to register. There's no "oh well she's family" box unless she is doing it free.

Thanks for the tip

That is great Elle.

Two things though:

• Be prepared for the possibility that she may not be able to manage full time plus nights and weekends. As in, may be very happy with the idea at the moment, but not physically cope when it happens. Watch out for signs of that. Also bear in mind that if she hires a nanny to help, there could be friction between them. It's hard for that outside nanny to serve two 'masters'.

• You need to get this properly sorted from a PAYE perspective. If you pay her, you are her employer. If there is another nanny involved, you need to be very clear who is the nanny's employer (you, or her? Bear in mind that, if it is her, you can't fire or discipline that nanny). You absolutely must, must do this properly with income tax and NI deductions. You could find yourself with a whopper of a bill otherwise. Organisations like PAYE for Nannies, Nanny tax, etc will all (for an annual fee) deal with all of this for you and advise how to set it up.

If there's the possibility she may hire a nanny, why don't you just do this? Them mil could be emergency childcare or extra childcare.

I think you are creating a heap of tax and accountability problems here.

We're definitely not giving MIL the money as a "salary", as she doesn't want to be paid for childcare anyway. It's just money to help our parents-in-law get by, because neither of them will be working by then. And they can use part of it to hire a nanny if they so wish (in which case they'll sort out the tax stuff). Baby will probably sleep at their house (which is quite close to us) during periods when we're both working.

It doesn't matter if YOU don't see it as salary I'm afraid Elle. It is how HMRC see it that counts.

If you start giving your parents money at the same time that your parents provide childcare (or now in anticipation of them doing so) you are likely setting yourself up for a massive tax bill if and when they catch you.

I don't understand. Plenty of people I know give their parents money on a regular basis, especially when they don't have an income of their own. And plenty of grandparents I know look after their grandchildren on a very frequent basis (which appears to be almost unheard of on mumsnet). The very nature of family relationships is reciprocal. What if we're living in the same house, my parents-in-law retire, we continue to work, and the parents-in-law do all the household chores? - Do we have to register them as employed cleaners? Absolutely ridiculous.

It's not ridiculous.

You are planning to start giving your parents money at the same time they start providing childcare. You are planning on giving them a regular amount. It isn't unreasonable for HMRC to see that as salary for childcare.

You might see it as ridiculous but HMRC do not.

Someone provides a service. The same someone receives money. HMRC view this as pay for the service.

If you were already giving your MIL £2000 a month to support her and this amount remained unchanged after she started doing childcare, you'd probably be ok (though if you died then she might be caught by IHT on the gifts)

If you all lived together and she did the cleaning and you didn't pay her for this, that would be ok.

It's not up to you whether it's salary or not, unfortunately.

www.grandparentsplus.org.uk/grandparents-helping-childcare

^Should I get paid by my son / daughter to look after their child?

This may be an important issue for you to discuss at the outset. One common arrangement is for parents cover the grandparents’ expenses (lunch, outings etc). A minority of parents do pay grandparents for providing childcare, but many grandparents are quite happy to look after their grandchildren for nothing. When that is the case, parents may choose to treat the grandparents to a meal out or small gifts as a way to say thank you.

Legally, they can also give you money if they wish, but if this is a payment for childcare rather than a gift, then you become their employee. An employer-employee relationship entails certain rights and responsibilities including potential tax liability (depending on your total income).^

And truly and honestly, we're giving them this money to cover their expenses (incl nanny), to thank them for their generosity, and to help them get by during their retirement (i.e. it's a gift). We don't see it as an employer-employee relationship at all, therefore HMRC might decide to have a look at us, but I doubt they'll find anything to do.

Sorry, I meant to put the three paragraphs between quotes. It's copied from the website.

GarthsUncle - I'm pretty au fait with inheritance tax, as my own mum died 2 years ago. Regular maintenance payments are exempt, including to "relatives who are dependent on you".

So people who were initially calling me "presumptuous" and being outraged at the idea that I'd even ask my MIL for help - now you're trying to catch me out on the law. Chill out guys, just be happy.

Honestly Elle, from my knowledge of HMRC, your optimism could well be massively misplaced. You need some expert advice.

Your own quotation (which I found too), says that payment for childcare is taxable.

You pay their expenses. That's fine. You pay for a nanny, well I am not sure about that as I still don't understand why you wouldn't employ the nanny directly.

You give them money to 'thank them for their generosity'. That's pay. Assuming we aren't talking about the odd thank you lunch, etc.

You give them money to 'help with their retirement'. Which coincidentally starts when they start looking after your child (or during your pregnancy and after childcare has been discussed). They are doing full time + childcare. You haven't been giving them your whole salary until now, have you? And your mother in law will be giving up paid employment to take on this responsibility. HMRC will quite rightly see this as pay.

Honestly, don't be naïve. If HMRC see this, they will likely assess you for tax and send you a big bill with interest and penalties. And quite frankly, I wouldn't blame them. If you'd been giving your in laws money to support them up until now that would be different. But you haven't. And you wouldn't be giving it to them if they weren't doing the childcare (how could you, you'd be paying someone else).

We are not trying to catch you out on the law, we are trying to help you!

OK, we'll employ the nanny ourselves. No biggie We have a whole year to figure out the practicalities.

Sorry if this is a stupid question but how would HMRC find out that the OP is giving money to her in laws?