At Nannytax we mostly advise against nannies taking the self-employment route due to the potential risks involved for both parties. If a nanny does choose to provide work on a self-employed basis then the family must get this status verified by HMRC. Learn more about self employment vs employment for nannies.
What is the difference between employed and self-employed?
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
Can a nanny be self-employed?
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.
When might a nanny be self-employed?
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.
What are the risks for nannies?
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.
What are the risks for families?
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.
What if my nanny was self employed?
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.
Nannytax and Nanny Employment
At Nannytax we offer a fully comprehensive nanny payroll service. Our team will be on hand to support you throughout the employment of your nanny. We can deal with HMRC, run the payslips and you will also have unlimited access to a team of HR advisors. Find out more today.
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