I think that if you are her only source of income and she spends the majority of her time inside your home then you are legally obligated to take her on as your employee. Is this your plan? Although I'm sure tha many people would just pay cash and not say anything to anyone about taxes.
Suggest you check out the ofsted website to find out what qualifies someone as a childminder. It is illegal in this country to hire someone to work in your home and pay them on a contract basis. You must take on employer resonsibilities.
Sorry if this isn't what you want to hear. I think what you propose is a good idea. I just wouldn't want you to find out later that you owe the government a whole wad of money.
However, if she took your kids back to her house... then I think she could be a childminder and responsible for her own taxes. But then I think she would have to be a registered childminder.
Of course, you always cheat and pay her in cash. Not a route I would recommend. But I'm sure people do it!