Types of employment
Live-in Nanny:
A live-in nanny lives as part of the family household. If you provide
her with her own accommodation (with a separate front door and separate metering
for gas, water and electricity) you may have to report this as a taxable
benefit. Nannies who live as part of the family are exempt from the National
Minimum Wage.
Daily/Live-out Nanny:
A daily nanny lives separately from the family and pays for her own accommodation.
She works set hours as stipulated in her contract.
Part-time:
If your nanny works for you on a part-time basis and you pay her
less than £105 per week, but she has another job that brings her total earnings above the weekly threshold, you will still have to register as an employer
as you may have to pay tax and NIC on her behalf. Bear in mind that if you fail to comply
with your responsibilities as an employer it is you HMRC will
penalise, not your nanny. Always find out if your nanny has another job and
ask her to put this in writing.
Temporary:
You must pay your nanny's tax and NIC even if she is only employed by you
on a temporary basis. Generally speaking a nanny does not fit HMRC criteria for self-employment status and so it is your responsibility
as her employer to ensure that tax and NICs are deducted from her salary.
In some cases nanny agencies put temporary nannies through their own payroll,
but you need to find this out. If nanny claims to be self-employed make
sure to get written confirmation from her tax office.