When you employ a Nanny and pay
them more than £102 per week, you are required by law to register with
the Inland Revenue as an employer and start paying PAYE.Under the new Self-Assessment tax regime, an employee is required to keep payslips, P45's (part 1a) and P60's (end of year summary) provided by their employer as proof of earnings (also needed when applying for a mortgage or loan). National Insurance Contributions go towards an employee's entitlement to unemployment and state pensions benefit.
If you don't declare your liability to pay tax, and it then comes to light, it is YOU the employer, not your Nanny, who will be pursued for the payment. Employers are also required by law to provide payslips for their nanny, detailing the tax and NI deductions made to her gross salary.
If your nanny splits his/her week between several employers you are still required to register. Nannies cannot be classified as self-employed (with the exception of maternity nurses), as they do not meet the Inland Revenue's self-employment criteria. Having two or even three part-time jobs does not make any difference in this respect.
The Inland Revenue will charge penalties to registered employers who are late with their tax/NI payments and paperwork. Failure to pay all tax/NI liabilities by 19th April following the end of a tax year results in interest being charged on the amount outstanding, and if you don't file your Employer's Annual Returns by 19th of May you will incur penalties of £100 for every month you file late!! Our Nanny Payroll Service costs £235 per annum- a small price to pay for complete peace of mind. And if your nanny stays for a shorter period, we will refund you £10 per month for the unused months or carry them forward for a new nanny.
We also now offer an e-service, for £220 per year. Reports will be sent to you via email, instead of post (excluding documents like P45's and P60's, of course). Your nanny will have to agree to receive payslips by email and send us an email confirmation of this.
We will submit your Employer's Annual Return and other submissions to HMRC "Electronically" as is now compulsory.
Find out about Childcare Vouchers
Testimonials for The Office Concept
Download a P46, for a new employee without a valid P45. (P45's must be dated no earlier than 6th April in the current tax year.)
The Office Concept is a member of The Federation of Small Businesses..