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Nanny contract advice

7 replies

Simic · 01/10/2010 10:37

We are about to start using the services of a nanny who is self employed and will work 30 hours a week with us and then bill us for those hours. She says that she works this such that when we are on holiday, we give her notice in good time and then we do not pay for those hours. She then would spend those days doing supply work at one of a few nursery schools where she has done supply cover in the past.
We are in the process of drawing up a contract with her but in it she has only detailed the starting date and that we will pay so much per hour for 30 hours a week work.
Can anyone give me any help on a suggested clause that we could put into the contract to specify this arrangement regarding holidays???
Thank you!

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flowerybeanbag · 01/10/2010 10:39

On what basis is she self-employed? It sounds as though she will be employed by you for 30 hours a week and will elect to work elsewhere sometimes during her holidays.

Simic · 01/10/2010 10:44

She has her own "company" - i.e. our hourly rate includes VAT but we don't pay contributions to social security for her - we are not her employer but she is providing us with a service which she bills at an hourly rate - as would a lawyer or a cleaning firm.

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JiggeryPopery · 01/10/2010 10:55

tbh from what I know of nanny contracts, you are on dodgy ground

please take some advice on this - you don't want to end up getting investigated by the Inland Revenue and then faced with a massive bill for her tax

flowerybeanbag · 01/10/2010 10:56

Yes I realise how self-employment works, but it's not something either you or she get to choose. Whether a person is defined (by HMRC or by an employment tribunal) as self-employed or employed depends on the nature of their relationship with the 'employer'. You will have a different relationship with the nanny who looks after your children week in week out than you would with a lawyer who gives you advice every so often or a cleaning firm who employ a cleaner on your behalf and invoice you.

Most nannies would not be able to be legitimately self-employed unless they are doing lots of short-term contracts, like maternity nannies do, or unless their hours vary weekly and they have lots of clients or similar.

It's up to you to satisfy yourself as to the nature of the relationship and make yourself aware of your obligations and her rights. Just because she invoices you and pays her own tax doesn't mean she is not technically 'employed' and therefore entitled to paid holiday, protection against unfair dismissal, maternity rights etc

If she were genuinely self-employed you wouldn't need anything in the contract about what she can or can't do in holiday time, you would just need something stating that x amount of notice will be given if services are not required. But if she will be working for you 30 hours a week all year except for a few weeks holiday time, she sounds employed and the document should be an employment contract regardless of how she gets paid.

Have a look here and here. If she can't send someone else to do the work instead of her, if she works on your premises, if she doesn't have lots of clients, is under your control and direction and gets a regular 'salary', then she will be employed.

Simic · 01/10/2010 11:18

Thanks very much for this. This is very useful.

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doesthismatter · 01/10/2010 11:43

Limited companies used to be a way of avoiding tax but there is something called IR35 which the Inland Revenue use to make people with these limited companies ("personal service companies") pay taxes etc. If they decide they are actually "employed" they will work out what tax should have been paid and ignore the company and make them pay the normal tax.

On top of that the person will still have the costs of running the company including paying employer's national insurance, filing accounts etc So it can end up costing them more than just being employed in the more usual way.

If she is effectively "employed" you could end up caught up in this if it is alleged that her taxes etc havent been paid. I would be careful about this.

Simic · 01/10/2010 12:20

Thanks for all your help! We'll get a solicitor to sort us out!

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