If you employ a nanny in the UK and you pay them more than £110 per week (tax year 2010/2011) you have the same legal responsibilities as a commercial employer.
The law requires you to:
Register as an employer
Set up and operate a PAYE scheme on your employee's behalf
Keep tax records on their behalf
Provide your employee with regular payslips
Provide them with an employment contract
Pay regular income tax and NI contributions
Pay employer's NI contributions
File an employer's annual tax return.
This obligation applies even for short periods of employment, and to all employment taking place in the UK, irrespective of the country of origin of the nanny, or of the employer!
National Insurance
National Insurance contributions go towards your nanny's statutory entitlements such as unemployment benefit, state pension and SMP. Not declaring their salary in full is not only illegal but also affects these and other rights.
Self Employed?
Self-employment is not an option for nannies as they do not meet the HMRC criteria for self-employment. If liability to pay tax is not declared to HMRC, and this comes to light, then it is you, the employer, and not your nanny, who will be pursued for payment.
Employing a Nanny
Becoming an employer, especially for the first time, can be both stressful and confusing and without working knowledge of the tax system and current employment law you are entering a minefield.
Businesses use skilled payroll, legal and human resources professionals. Now you can too - at a fraction of the price. Tinies Payroll, as brought to you by Nannytax has an outstanding reputation for customer service.
You also have unlimited access to our comprehensive legal advice helpline. Clear and readily accessible legal advice is a key element in keeping employment on the right track and preventing a breakdown in communication.
Our low-cost fixed-fee service offers outstanding value for money. There are no extra costs - and no meter running - when you use Tinies Payroll.
Further Payroll information
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