The Self-Employed Nanny Conundrum

Nannies - the silent voice in the childcare industry

Childcarers, and in particular nannies, tend not to have much of a voice in our industry, despite the great work they do. They often enter into jobs not knowing their rights.

At Tinies we feel strongly that nannies deserve to be treated the same as any other employee, which means having a proper contract and being paid correctly. All that is included in the childcare services we offer.

There are agencies out there like Tinies who do the same. I sit on a childcare committee with a lovely bunch of ladies who all promote the rights of nannies. We volunteer to be members of REC, the Recruitment and Employment Confederation, which sets high standards on how we recruit and treat our candidates.

But what about the nannies who don't use reputable agencies to find work?

The dangers of online nanny recruitment

There has been a huge increase in the number of online childcare recruitment websites over the last few years. And as you can imagine, I'm not a fan. The amount of childcarers (and parents) who have come to us with horror stories after using these websites is growing.

There's the story of the nanny who took a live-in job through a website, and found out her accommodation was literally a storage cupboard (shades of Harry Potter under the stairs), which she was expected to stay in whenever she was not on duty. Or the parent who hired a nanny who falsified all of her documents including her right to work in the UK.

But the latest growing trend on these websites is to promote the idea of hiring a self-employed nanny.

What the websites don't tell you is that in 99.9% of cases, a nanny can't be self-employed. So actually what they are really promoting is paying a nanny cash in hand. Which unfortunately in the eyes of HMRC is tax evasion.

Can a nanny ever be self-employed?

Tinies has written up some guidance to help parents work out if their nanny can be self-employed:

Download our Guide: Can a Nanny Be Self-Employed?

HMRC has also developed an Employment Status Indicator tool on its website to help employers establish an employment status of a worker.

The consequences of paying cash in hand are quite severe. Since April 2013, HMRC have tightened up their systems, so that those employers paying 'cash in hand' are far more likely to be caught out and be charged hefty fines.

But it's not only the parents who need to be wary of this. Nannies need to understand that being self-employed means they lose the majority of their employment rights.

Parents and nannies alike need to be wary

The right to be paid holiday, sick pay and maternity pay are just some of those rights that are lost. Plus, employers can easily terminate the employment without the nanny having any protection or recourse to the courts. We have found that nannies are being forced into self-employed status without actually understanding the implications.

I'm the first person to sympathise with parents about the high costs of childcare, which is made worse by having to pay tax and NI on top of a nanny's salary. For most of us, that means the majority of our wages goes on childcare. All past governments and the present government have done next to nothing to ease that burden because they have focussed on childcare outside the home.

But it doesn't mean that paying cash in hand to a nanny is the answer either.

Amanda Coxen, Working Mum and Tinies Director

More information about self-employed nannies:

• Download our Guide
• Visit the HMRC website
• Contact your local Tinies Nanny Agency for hiring advice
• If hiring a nanny yourself, check out our Nanny Screening Services