We are often asked if nannies can be self-employed and therefore sort out their own Tax and National Insurance. Under HMRC rule nannies cannot generally be classed as self-employed for the reasons set out below.
A worker is considered 'employed' if they:
- Have to do 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.
- Work a set number of hours.
- 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 considered 'self-employed' if they:
- Can hire someone else to do their work or engage helpers at their own expense.
- Risk their own money.
- 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.
- 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 people.
- Have to correct unsatisfactory work in their own time and at their own expense.
Please note that these lists are not exhaustive. Click here to read what the government says about self-employment.
Exceptions: When might a nanny be self-employed?
In some cases, HMRC do grant nannies self-employed status, for example, if the nanny works in a series of temporary positions, or works for three or more families at the same time (in which case she would have to register with Ofsted as a childminder).
The nanny should contact HMRC directly for approval if she requires this. HRMC will assess each situation individually.
If a nanny was previously self employed
- Transfer of a self-employed status between jobs is not automatic.
- The employer is responsible for requesting written confirmation of the nanny's self-employed status from HMRC.
- If it later comes to light that nanny is not self-employed then it's the employer, not the nanny, who will be committing a criminal offence and pursued for unpaid taxes.