Nanny Tax and Insurance implications
If you employ a nanny, you have a number of legal obligations. You must have Public and Employee Liability Insurance, you must account for tax and national insurance on the nannies’ salary, and you have to issue P60, P45 and other tax forms as the need arises. Often these are difficult issues for most parents to deal with; after all, you got a nanny to save yourself time and trouble. Well of course, many other people have already faced these issues. Some parents do this all themselves; often these parents are accountants who do have an advantage over the rest of us! Other parents find a general payroll service, which can work quite well.
a nanny plus her charge
For many parents though the best solution is to use a specialist Nanny Tax service. For a fee, the service will handle all nanny payroll issues from registration with HMCR, to monthly payroll calculations, paying in the nannies bank account and also completing the necessary forms. Often they are able to offer additional services such as, contracts of employment, legal and other specialist advice. Typically, the fee would be £100+vat or a little more each year. There are a number of companies who provide this Nanny Tax service, some nanny agencies certainly do and others include general payroll services who have over the years come to specialise in nanny payroll, others are sizeable limited companies established specifically to address nanny pay and tax issues. If you do not enjoy calculating tax and filling out tedious forms one of these services might be for you.