6 April 2005
The new tax year - how does it affect you?
The new financial year commences today and with it a raft of new legislation comes into force, some of which affects nanny employers.
- The personal tax-free allowance has increased to £4895 per year.
- The rate for Statutory Maternity Pay has increased to £106 gross per week.
- The rate for Statutory Sick Pay has increased to £68.20 per week.
- The rates for Statutory Adoption Pay and Statutory Paternity Pay have increased to £106 gross per week.
A light touch approval scheme for nannies is now available, which enables parents to receive some financial support towards the cost of employing a nanny. The scheme is entirely voluntary but only parents who used an approved nanny will be eligible.
Two types of financial support financial support are available:
- Employer-supported childcare vouchers will make each working parent in the family exempt from paying tax and NI on the first £50 per week they spend on childcare. In order to take advantage of childcare vouchers the parents’ employers must sign up to a childcare voucher scheme. They will then supply the vouchers directly to the parents, who can use them to pay their nanny. Nanny will in turn redeem the value of the voucher from the voucher company, usually by direct payment into her bank account.
- Working tax credits. Families with a combined family income below £59,000 can also use childcare vouchers but will in addition be eligible for working tax credit support for childcare in their own home. Parents on the lowest incomes will receive the most with support tapering off towards the higher end of the scale. The financial support will cover 70% of childcare costs of up to £175 per week for parents with one child to £300 for families with two or more children.
In order to become approved nanny needs to provide evidence that she has a childcare qualification or has attended an induction course, which is deemed appropriate, she must also hold a valid paediatric first aid certificate and have an enhanced CRB (Criminal Records Bureau) check including a POCA (Protection of Children’s Act) list check.
The approval will last for 12 months and costs £96 per year; this includes the cost of an enhanced CRB disclosure, which must be done even if nanny has recently had one done. The costs of a first aid certificate and the induction course in childcare, if she doesn’t hold any professional qualifications, will be on top of the £96.
The scheme is available in England only.
To find out more about the scheme visit the Sure Start website.