12 December 2003
How will the Chancellor's pre-budget report affect nanny employment?
The personal tax-free allowance has been increased by £130
to £4745 per annum. This means that the first £4745 earned every
year is tax-free.
The National Insurance threshold has been increased from £89 to £91 per week, which means that NICs are only payable on salaries above this amount.
The income tax threshold has been increased from £89 to £91 per week.
As of April 2004 the Lower Earnings Level (LEL) has been increased from £77 to £79 per week. This is the amount a nanny (or any other employee) has to earn in order to qualify for statutory benefits.
Statutory Sick Pay has been increased from £64.35 to £66.15 gross per week.
The lower rate Statutory Maternity Pay has been increased from £100
gross per week to £102.80.
Statutory Paternity Pay and Statutory Adoption Pay have been
increased from £100 gross per week to £102.80.
Childcare Vouchers - currently when you pay your nanny in childcare vouchers you can claim unlimited NI relief, but as of April 2004 that will change and you will be able to claim both tax and NI relief, but only on the first £50 you pay her, and only if your nanny registers as a childminder.
Tax Credits - parents can now claim support for the costs of
using approved childcare in their own home. Currently only registered childminders
can become approved home child carers, so those new to the scheme need to
register first as a childminder. The Government intends to bring forward
proposals, for consultation in spring 2004, to streamline this process and
widen home child caring.
Back to news index
