Taxing Nannies believe that the nanny payroll service is more than just ensuring our clients pay the correct tax for their nanny – it is about delivering a first class, professional, welcoming service.
The following are examples of how we go that extra mile for our clients:
The introductory telephone call
Many prospective clients telephone our offices before subscribing. Our team, in their professional, friendly manner will always try to give as much information as possible and spend as much time is needed to ensure the caller is armed with the information needed. We are happy to advise about various matters concerning the nanny tax procedure such the tax implications of different salary payments, even before the prospective clients commit to our service. These early conversations can be crucial in ensuring the employer fully understands the responsibilities and financial implications of employing a nanny at the earliest opportunity.
Dedicated HMRC officers
Over the years, we have built up good relationships with HM Revenue & Customs and as a result we have a team of dedicated HMRC officers who deal with all our client’s nanny PAYE affairs. This means that we do not have to deal with call centres, and can process and obtain information regarding our client’s affairs speedily and efficiently. Where there are issues regarding HMRC procedures, we have access to senior officials who can liaise with HMRC on our behalf to resolve problems on behalf of our clients.
Changes in tax codes
At the beginning of each tax year, and sometimes during the course of the financial year, we receive tax codes for our clients’ nannies. Rather than just processing the tax codes, we examine each code, and where it is different to that expected, we contact our clients to ascertain whether there has been any change in the nanny’s circumstances. We do this to ensure that our clients, many of whom pay net salaries, do not get burdened with additional nanny PAYE liabilities, such as underpayments of tax relating to prior employments.
Changes in nanny share arrangements
When a nanny, who has more than one job, is leaving one employment, and we act for the other employer, we always contact the nanny and the other employer to ensure that the correct tax code continues to be used. This ensures that our clients pay the correct nanny tax deductions and benefit from any additional personal allowances available.
Termination of employment
When our clients advise us that their nanny is leaving their employment, we enter into discussions with them to ensure that the correct adjustments to the nanny pay are made with regard to redundancy, payments in lieu of notice and any outstanding holiday pay, and that the nanny PAYE deductions are correct. Although we are not employment lawyers, we have the experience to advise on many employment issues and have access to an employment legal service for queries that we are not able to answer ourselves. By discussing matters with our clients, we are often able to prevent situations which could lead to unfair dismissal claims.
FASTER PAYMENT SERVICE
HMRC have announced that UK tax and NI payments can now be made via the Faster Payment Service so that electronic payments should clear HMRC’s account the same day. Previously, payments made electronically did not clear for 3 working days giving rise to potential penalties and interest.
Taxpayers are advised to contact their own bank or building society before making a payment to confirm that their own bank can process Faster Payments, whether there are any daily limits and the cut off time to make a payment to clear that day. It is also important to ensure that the correct bank account details and PAYE collection reference are used. In most cases the bank account details will be Account 12001020, sort code 08-32-10.
Since 6th April 2011 all forms P45 and P46 must be filed electronically with HMRC and should not under any circumstances be sent to the tax office. Up until 5th January 2012, no penalties were issued, but warning letters have been sent to employers who have not filed forms online. Penalties range from £100 upwards where 2 or more paper forms have been filed. We would therefore urge all employers to ensure that their nannies do not send the P46 when they are given it to sign but return it to Taxing Nannies for electronic submission.
NEW PAYE CODING NOTICES
New PAYE coding notices are in the process of being sent to employees informing them of new tax codes for 2012/13. The tax codes should include all allowances and relief’s that your nanny is entitled to and in most cases should be the single person’s allowance which will be 810L from 6th April 2012 where it is the nanny’s sole employment. Where there is a nanny share then the code should have been adjusted so that the total allowance for her combined employments totals 810L. Please send all tax code notices to us for checking so that we can ensure that the correct nanny tax is deducted.
If the tax code is not for the full single person’s allowance it may be that there are adjustments for underpayments of tax for a previous year which may not be relevant to your employment and this could have a bearing on the nanny PAYE and National Insurance you pay where your nanny receives a net salary.
0T TAX CODE
New regulations were introduced in 2011 which changed the tax code that applies to payments of income to an employee after cessation of employment which have not been included in form P45. The 0T tax code deducts income tax at the basic and higher rates without giving any personal allowance. Therefore it is essential to ensure that all nanny wage payments made on cessation of employment are notified in time so that the normal PAYE tax code can be applied. Cessation payments such as redundancy and ex-gratia payments will normally be exempt from PAYE and National Insurance if less than £30,000.
REMOVAL OF SIMPLIFIED/DOMESTIC PAYE SCHEMES
In the past, employers registering for PAYE schemes themselves could often apply for a simplified PAYE scheme with the result that no penalties were payable for late submission of forms P35. However, from April 2012, these schemes will no longer be available and is therefore even more important that employers contact us as soon as their nannies commence work to ensure that the end of year return can be filed on time.