Taxing Nannies

About Taxing Nannies

Taxing Nannies was established in 1995 as one of the original specialist payroll agencies for employers of nannies.

Since our inception, we have helped thousands of parents through the nanny tax minefield. No longer will you have to worry about issues such as calculating tax and national insurance, how to write a contract of employment or what to do about Statutory Sick Pay or Maternity Pay. In fact, you needn't have any contact with the Inland Revenue at all. We'll handle the whole thing for you.
Posts tagged "Tax UK"

1. I have received a leaflet from HMRC regarding RTI – what does this mean?

RTI stands for real time information. It is a system to be introduced in 2013 whereby employers provide HMRC with information regarding PAYE and national insurance each time an employee is paid. RTI will become compulsory for small employers in October 2013. The system is being brought in to make it easier to implement Universal Credits, which will replace the current benefit system from October 2013.

2. How does RTI differ from what happens now?

At present a nanny payroll is operated for the whole tax year, with nanny PAYE payments being made on a monthly or quarterly basis to HMRC. At the end of the tax year, a form P35, End of Year Return, is submitted electronically which contains information concerning all the employees during the tax year with details of the nanny payroll operated during that period. This is the only time that HMRC obtain the information regarding nanny pay. With RTI, HMRC will obtain the information each pay date. Where employers pay by BACS the information will be provided to HMRC as part of the payment process. However, most small employers do not pay their nannies by BACS (these are not the same as electronic bank payments) and an alternative system will be adopted for filing which will be submitted via the payroll software. End of Year Returns will no longer be required.

3. What difference will it make to me as an employer?

Taxing Nannies will have procedures in place to implement RTI and we will ensure for employers who use our nanny tax service, that it will have little impact. It will be more important for employers to supply the information regarding any changes to their nanny’s salary or payroll details on time and information concerning the nanny’s basic details such as address, national insurance number and date of birth will be essential to enable us to process the nanny payroll. HMRC will though be able to identify late payments of PAYE and National Insurance much more easily and clients who pay late are likely to receive demands for underpaid tax.

4. My nanny does not earn much – will it still affect me as an employer?

At present, an employer needs to register with HMRC if their employee earns over the lower earnings level for national insurance of £107 per week. The implementation of RTI combined with Universal Credits will mean that all employees will require to be registered with HMRC, regardless of the level of income.

5. What happens if I fail to register as an employer?

HMRC have already indicated that they will be clamping down on nanny tax avoidance and RTI will give them more information to be able to identify gaps where there are no PAYE deductions for a nanny. You will therefore run the risk of being investigated and being charged penalties for failing to register and interest and penalties on unpaid PAYE and National Insurance together with an additional penalty of 100% of the outstanding nanny tax.

Taxing Nannies a Tax UK agency guides you through Nanny PAYE services and Nanny Paye Laws on what to take care on hiring a Nanny.

Avoid the potential nightmare of battling through forms and calculations, paying the wrong tax, getting fined £100 per month for late returns, dealing with the taxman etc.

Taxing Nannies is a specialist nanny payroll and nanny PAYE service that has helped thousands of parents like yourself through this minefield.

For just £20 per month (including VAT) we will take care of everything related to nanny tax issues including opening a nanny PAYE scheme, calculating nanny tax and National Insurance and providing regular payslips to your nanny, advising on Sick Pay and Maternity Pay, and handling all dealings with HM Revenue & Customs. (View our full list of payroll services.)


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Taxing Nannies is the best nanny tax and payroll service, established in 1995.We have a very high ratio of staff to clients and are led by Sara Graff, a mother with much personal experience of employing a nanny as well as a Chartered Accountant and Member of the Institute of Taxation for over twenty years. The payroll service is highly personal, responsive and efficient – and, very inexpensive.


Employing a nanny brings with it the same obligations as any business taking on an employee. By law, therefore, an employer must account for Income Tax and National Insurance Contributions on the salary paid to a nanny or mothers help, whether they are full time, part time or temporary. A nanny’s salary is normally quoted net of deductions (i.e. the amount she wishes to receive in her hand), and it is therefore the employers responsibility to pay over to PAYE, Employees National Insurance and Employers National Insurance to HM Revenue & Customs in addition to the net salary paid to the nanny. Expenses paid in benefits provided on behalf of a nanny in addition to her salary may be liable to a separate charge to Tax and National Insurance.


Remember that avoiding the taxman is illegal. If HMRC catches up with an employer who has failed to declare their nanny for tax uk purposes or has tried to maintain that she is self-employed, then they will be liable to pay the correct Tax and National Insurance Contributions and interest and penalties. There is no legal right to seek repayment from the nanny.


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Taxing Nannies would be happy to assist you should you be looking to outsource your payroll as at present Sara Graff carries out a tax and payroll service for employers of housekeepers, gardeners, butlers, drivers, cleaners and other domestic staff as well as running payrolls for a range of nurseries and other small businesses.

Sara Graff is a qualified Chartered Accountant and Chartered Tax Advisor and provides accounting and tax services in addition to the general Taxing Nannies nanny tax and nanny PAYE service. She would be happy to assist you in preparing your personal tax return or assist you with other accounting services and if you wish to avail yourselves of this service or would like some general payroll advice or help please contact Sara on +44 (0)208 882 6847.

Taxing Nannies is a nanny tax and nanny PAYE agency based in North East London catering for anyone who employs domestic staff. Sara Graff, who started the agency in 1995, also runs Sara Graff and Co, an accountancy company offering tax advice and tax services to businesses across the UK.

Sara trained as a Chartered Accountant and qualified at the age of twenty two and passed the Institute of Taxation examinations a couple of years later. Realising how essential it was to build relationships with clients and how communication is such an important part of being a Chartered Accountant, she appreciates that being a good accountant is more about being a “people” person than being able to deal with the numbers.

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Following the birth of her two sons, Sara continued to work for a firm of accountants but when she returned from maternity leave after her younger son was born, she was made redundant. She came across an article in the Daily Telegraph which discussed the impending penalty regime for the late filing of employers’ end of year returns and how this was going to affect small employers paying tax for their employees including those that employed nannies. She already employed a nanny to look after her two small children and thought that there may be a niche to start a specialist payroll agency helping employers to deal with paying nanny taxes. With the help of her redundancy package, Sara launched Taxing Nannies in 1995.

Taxing Nannies delivers a very high level of personal service to their clients. Clients often contact the all female Taxing Nannies team whenever they have a problem in dealing with their nanny tax. The team are approachable and friendly and very happy to discuss issues related to employing nannies or domestic staff. Denise Connick and Sally Beale have worked with Sara for 14 years and 12 years respectively.

Taxing Nannies has grown as a business; however they still manage to provide a very personal service with many face to face meetings and a pro-active service. They provide regular newsletters to clients, bringing issues such as the implications of a change in salary or tax code to an individual client’s attention, rather than just going through the motions of amending the payslip to reflect those changes.

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A large proportion of Taxing Nannies’ clients reside in London and the Home Counties but we act for employers of nannies nationwide including Scotland.  The majority of their clients are parents employing nannies and these cover a complete cross section of the public.The team also works with employers of housekeepers, butlers, gardeners and other domestic staff and offers payrolls services for businesses and directors.

Taxing Nannies are not the cheapest nanny payroll agency but Sara Graff made a conscious decision that they do not wish to sacrifice the quality of our service.  Fees still only work out at 67p per day inclusive of VAT and have remained unchanged for six years.

Most of Taxing Nannies nanny tax UK and payroll clients are busy people, many juggling a demanding career with a young family and busy home life. The team aims to ease their burden by removing one hassle from their hectic schedule and experience has shown that the Taxing Nannies service makes a real difference.

To contact Sara and her team about the services offered by Taxing Nannies or Sara Graff and Co, email post@taxingnannies or call them on 020 8882 6847.

An employer of a nanny has a duty to check that they are entitled to work in the United Kingdom under The Immigration, Asylum and Nationality Act 2006. Fines will be implemented of up to £10,000 for each illegally employed worker and unlimited fines and imprisonment of up to 2 years can be imposed for knowingly employing illegal workers. You may remember the case involving Baroness Scotland in 2009, where she was fined £5,000 for failing to keeping copies of documents relating to her Tongan cleaner.


You need to obtain copies of certain documents from all potential employees (whether you believe them to be British or not). You also need to satisfy yourself that your potential employee is the rightful holder of any of the documents they present to you and to make a photocopy or a scan of the following:

  • a) The front cover and pages containing the employee’s personal details, photograph and signature

  • b) Any page containing a UK stamp or endorsement

The documents that should be checked are:

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EITHER - any one of the following:
1. A passport showing that the holder is a British citizen, or has a right of abode in the UK or
2. A passport or identity card showing that the holder is a national of an EEA or Switzerland or
3. A passport or travel document showing that the holder can stay indefinitely in the UK

4. Residence permit, registration certificate or omHHHHHome office or Border Agency document indicating rights of permanent residence to an EEA or Swiss national or family member

5. A passport or other travel documents indicating the holder is exempt from immigration control, is allowed to stay indefinitely in the country or has no time limit on their stay.


OR - two of the following:
1. An official document showing the employee’s permanent national insurance number

AND
1. A full birth certificate issued in the UK or channel Islands, Isle of Man or Ireland which includes the names of the holder’s parents or
2. A certificate of registration or naturalisation stating that the holder is a British citizen or
3. A letter or Immigration Status Document issued by the Home Office which indicates that the person can stay indefinitely in the UK or can do the type of work being offered or

4. Full UK, Channel Island, Isle of Man or Irish adoption certificate


OR
1. A passport or travel document or letter from the home Office endorsed to show that the holder is able to take the employment in question.

2. A work permit together with a passport or travel document or letter from the home Office endorsed to show that the holder is able to take the employment in question.

You need to satisfy yourself that your potential employee is the rightful holder of any of the documents they present to you and to make a photocopy or a scan of the following:

  • a) The front cover and pages containing the employee’s personal details, photograph and signature

  • b) Any page containing a UK stamp or endorsement

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EU EMPLOYEES

For most EU employees there is no restriction on working. If you employ a nanny from an EU country, you will need to view either a passport or national identity card.

However, it is very important to note that if your nanny is from Bulgaria or Romania they will need permission to work from the UK Border Agency before they can work as an employee.

The process for obtaining authorisation to work is in two stages:

1. The UK employer fist applies for approval of the employment under the work permit arrangements. (This does not apply to “domestic workers” but nannies are not included within this exemption).

  1. The Bulgarian or Romanian national must then apply for an Accession worker card.

No Accession Worker Card is required if the person is self-employed.

For further information please visit www.ind.homeoffice.gov.uk or you can ring the employers’ helpline on 08457 143 143.

Taxing Nannies a Tax UK agency guides you through Nanny Tax and Nanny Payee Laws on what to take care on hiring a Nanny.