If you employ a nanny in the United Kingdom you have the same legal responsibilities as a commercial employer, therefore the law requires you to:
- Register as an employer
- Set up and operate a PAYE (Pay As You Earn) scheme on your nanny’s behalf
- Keep tax records on their behalf
- Provide your nanny with regular payslips (Please go to nanny payroll services for more information)
- Provide them with an employment contract (Please go to nanny employment contract for more details)
- If your nanny earns more than £157 per week, pay National Insurance Contributions from their gross wage and also an employer’s National Insurance Contribution over and above their wage
- If your nanny earns more than £222 per week, pay income tax from their gross wage (on the assumption they only have one job with you)
- File an employer’s annual tax return
- Have employer’s liability insurance in place
- Enrol your employee within a qualifying pension scheme provided that they are eligible. Please see further details about pensions here.
These obligations also apply:
- In short-term employment (i.e. a week or longer)
- To any employment taking place in the UK – irrespective of the country of origin of the nanny or employer
Failure to register as an employer if you are paying your nanny above the weekly threshold is an offence, which can potentially lead to heavy penalties.
A nanny can not, according to HMRC’s criteria, be self-employed. It is the employer’s liabillity to declare their employee’s tax position to HMRC.
Please be aware of the following:
- Failure to file employer’s annual returns by 19 May can result in financial penalties
- Failure to pay all tax/NI liabilities before 19 April results in interest being charged on the amount outstanding
- Make sure your nanny is legally entitled to work in the UK – All UK employers are now required by law to make basic checks on every person they intend to employ in order to establish that they have a right to work in the UK and are here legally. These checks must be carried out on all potential employees whether or not you think they have a right to work in the UK by making assumptions based on their appearance or accent. You could face prosecution under the Race Relations Act 1976 and an unlimited fine if you do not ask all potential employees these questions
Parental Choice is aware that all these legal obligations can be daunting and time consuming. We have working knowledge of the current employment laws and the tax system and have a team of skilled payroll services and legal advisors. We can advise you and arrange these nanny payroll services for you.
Contact us today for free, impartial advice: please call 020 8979 6453 or email us on firstname.lastname@example.org