It is a fact that you are going to become an employer as nannies cannot be self-employed. With this come a number of responsibilities that you may not have considered nor had experience.
You will have to have a contract of employment in place within 12 weeks of the nanny starting work for you. You will need to think about holiday entitlement, restrictions on when your nanny can take holiday whether or not to pay sick pay over any statutory sick pay you would be obliged to pay amongst other things.
You will need to run a payroll. Whilst you will be paying your nanny a net amount each week, if she earns more than £149 per week you will also have to pay her employee and your employer NI contributions. If her pay exceeds £189 per week, you will also have to pay her tax. You will need to register yourself as an employer with HM Revenue and Customs for PAYE purposes. You must also register if your nanny has another job, even if you are paying her below the threshold. Even if you are paying below this level, you should still consider registering as this will enable her to receive state pension and other benefits.
Don’t be tempted to try and avoid paying the tax and NI contributions, as HMRC has stated that they will be looking hard at the status of any nanny’s employment. If you are found to be in breach of the law, you will have to pay over the tax and NI that you should have paid as well as penalties and interest.
It all seems daunting but help is readily to hand. Hummingbird Nannies recommend that families use Nannytax which is a nanny payroll service who will ensure that everything is in place and you have nothing to worry about. They can also help with contracts of employment and have a legal department available to you should the need arise.
To calculate your weekly total cost of your nanny, including Employer's National Insurance, follow the tax calculator link below.
A little bit more help...
Families who employ an Ofsted registered nanny can receive some financial contributions towards their childcare costs. There are two types of financial support available: employer-supported childcare vouchers and working tax credits.
However the income limit to qualify is quite low. As a rough guide, HMRC have quoted that a family will most likely qualify for tax credits if their total, combined annual income does not exceed £26,000 if they have 1 child and £32,200 for 2 children. As mentioned this is a rough guide. For more information about tax credits, please contact HMRC's Tax Credit Helpline on 0345 300 3900.
Ofsted registration is valid for 12 months and costs £103 per year, which includes the cost of an enhanced CRB disclosure.
In order to become registered with Ofsted, the nanny must meet certain criteria. She will need to have public liability insurance, a valid paediatric first-aid certificate and be able to confirm that she has the core skills in childcare.
Qualified nannies will not need to attend a course to enable her to register for Ofsted. However, unqualified but experienced nannies will need to attend a Common Core Skills Course. The nannies are also required to have an enhanced CRB (DBS) check but this will be part of the registration process.
So whilst you may not qualify for financial assistance from employing an Ofsted registered nanny, registration is a good kite mark of the quality of nanny you are employing.
As part of the interview process we carry out with all nannies who register with Hummingbird Nannies, we check that they have a current CRB (DBS) check, their qualifications, good references, a valid first aid certificate and whether they are Ofsted registered. It is one way that we help to simplify the process so there are fewer things for you to deal with.