A nanny employer's checklist

Employee Leaving (P45)
Whenever an employee leaves your employment you are required by law to provide them with a form P45, which Nannytax will issue on your behalf. This form summarises pay and tax received in your employment (or in the current tax year, to date) and enables the next employee to deduct the correct amount of income tax. Therefore please advice our office promptly before an employee leaves, or as soon after their leaving date as possible.

Payment and Information Deadlines and Penalties
All quarterly tax and NI payments are due to be paid to HMRC by the 19th of the month following the end of each calendar quarter. Nannytax will advice you accordingly in good time. For new employers the first payment will only be due once your new PAYE scheme has been set up by HMRC, and you will not be penalised if this is after the due date for any of the first three quarters of the tax year (starting in April). Nannytax will submit an employer's Annual Return and Declaration (P35) electronically at each tax year-end on your behalf, which will automatically qualify you for incentive payments from HMRC. Any changes to employment arrangements should be notified to us promptly, especially during this period as any delays in filing before-mentioned forms will trigger automatic Inland Revenue Penalties, and Nannytax has a large number of returns to complete and check on our subscriber's behalf in a very short period of time.

Redundancy Pay
There is a lot of confusion in nannying on the issue of redundancy. Many nannies, parents and nanny agencies assume that because of the unique circumstances that exist between a nanny and her employer, she doesn't qualify for redundancy pay. But if you no longer have a job for your nanny and she has been employed by you for two years or more she is entitled to redundancy pay just like any other employee. Similarly, if your circumstances change and you no longer have a full-time job for her, perhaps due to the children attending school full-time or one parent working part-time, and you want to employ your nanny on a part-time basis, you are required to first offer the 'new' position to the existing nanny. If she chooses not to continue working under the new conditions you are still required to pay her redundancy pay, unless she is on a fixed term contract.

Stakeholder Pensions
At present employers with less than five employees are not required to make stakeholder pensions available to their employees.

Statutory Holiday Pay
Up until recently all employees in the UK were entitled by law to 4 weeks paid leave every year. New holiday legislation has now been introduced and as of 1st October 2007 you are required to give at least 4 bank holidays as paid leave in addition to the 4 weeks. That means that all employees will now be entitled to 4.8 weeks holiday per year.

If your nanny works on a part-time basis and you want to know how many days she is entitled to, simply multiply the number of days she works each week with 4.8. The total should be rounded up to the nearest 1/2 day.

In April 2009 legislation will change again and all 8 bank holidays need to be given as paid leave.

Please note that the bank holidays do not need to be taken on the actual bank holiday, and it is up to you as the employer to choose when holiday should be taken. Employers whose nannies do not accompany them on holidays may like to agree with their nannies, when employment starts, that at least part of their entitlement is to be taken when they themselves are on holiday.

Statutory Maternity Pay
If your nanny becomes pregnant and is in your employment at a specific qualifying date, then you, as employer, are required by law to pay Statutory Maternity Pay (SMP), even is she subsequently leaves your employment before her period of maternity leave commences. However, you will not be out of pocket as Nannytax can reclaim virtually all SMP paid from the Contributions Agency on your behalf. Please contact our office for further details and advice on SMP. We can also give advice on Statutory Paternity Pay and Statutory Adoption Pay.

Statutory Sick Pay
If your nanny is unable to work through sickness, then she is entitled to Statutory Sick Pay (SSP) after the first three (working) days of absence. The first three days of absence are usually paid at her standard rate of pay, but this entirely at the employer's discretion. SSP is paid as either part of or instead of the normal wage. Your employee should provide a doctor's certificate or self-certify, explaining the reason for her absence. Nannytax can claim part of any SSP pay back from the Revenue on your behalf.

Student Loans
If your nanny has a student loan that she took out after August 1998 and if her salary exceeds £15,000 per annum (£1,250 per month or £288.46 per week) she is required to make regular repayments starting the 6 April after she leaves her course. Usually the amount payable is calculated as 9% of her income over the starting limit. Once Nannytax has been advised by HMRC that repayments are due, we will inform you when to start making deductions from nanny's wages and by how much. The amount deducted from her salary is shown on her payslip and is paid to HMRC along with your quarterly liabilities of tax and NICs. If nanny took out her student loan before August 1998, please contact The Student Loans Company on 0800 40 50 10 or visit their website http://www.slc.co.uk

Taxable Benefits
If you provide your nanny with a car for her private use, or any other benefits in kind, both you and she may be liable to pay some additional tax and NICs on these items. If you have agreed a fixed net wage with her then you should be aware that any additional liability would fall entirely on you, the employer.

 

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