If you employ a nanny in the UK you have the same legal responsibilities as a commercial employer and 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 her behalf
• Provide your nanny with regular payslips
• Provide her with an employment contract
• Pay regular income tax and National Insurance Contributions
• Pay employer's National Insurance Contributions
• File an employer's annual tax return

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 and career-damaging publicity.

Consider the following:
Failure to file employer's annual returns by 19 May can result in penalties of £100 per month filed late

Failure to pay all tax/NI liabilities before 19 April results in interest being charged on the amount outstanding. All these legal obligations can be not only complex but also time-consuming, especially for a first-time employer. Without working knowledge of the tax system and current employment law, you are entering a minefield. Businesses use skilled payroll, legal and human resources professionals, you can too - for a fraction of the price. Nannytax has more than 15 years' experience in domestic and nanny payroll and we can transform your hassle into peace of mind.