Self Employment

A worker is generally considered ’employed’ if they:

• Work a set number of hours
• Must undertake the work themselves
• Can be told at any time what to do, where to carry out the work or when and how to do it
• Can be moved from task to task
• Are paid by the hour, week, or month
• Can be paid overtime or receive bonus payments

A worker is generally considered self-employed if they:

• Can choose their own hours
• Can send someone in their place to undertake the work or engage helpers at their own expense
• Can decide what work to do, how and when to do the work and where to provide the services
• Regularly work for a number of families
• Provide the main items of equipment needed to do their job, not just the small tools that many employees provide for themselves
• Agree to do a job for a fixed price regardless of how long the job may take
• Must correct unsatisfactory work in their own time and at their own expense

Due to the nature of the job, nannies aren’t usually self-employed. Generally speaking, having a nanny is a personal and more flexible type of childcare tailored towards one family’s requirements. In comparison, a childminder is usually self-employed as they run a childcare service from their own home with set hours.

In some instances, HMRC may grant a nanny self-employment status. The most common example of this would be if a nanny works in a series of temporary positions, or with three or more families at one time. Every case can differ slightly, so we always advise that the nanny contacts HMRC directly regarding any self-employment queries.

A self-employed nanny will not have access to employment rights such as holiday pay, sick pay and maternity pay. The family the nanny works for can also easily terminate the employment. With a self-employment status, the nanny has no protection or recourse to the courts if this were to happen.

If you take on a self-employed nanny without carrying out the correct checks to confirm your nanny’s self-employment status, and it later comes to light that they have not been granted this status, you as the employer could face serious repercussions such as liability for all unpaid tax.

The transfer of a nanny’s self-employed status between jobs does not happen automatically. We would recommend that nannies check with HMRC and confirm whether they can continue being self-employed in their new role.

Families who are looking to take on a self-employed nanny are responsible for requesting written confirmation of the self-employed status from HMRC.