Due to a change in the law regarding child benefit last year, if you or your partner earn more than £50,000 and have claimed child benefit since January 2013, then the higher rate taxpayer/s will be required to complete a tax return for 2012/13. This is regardless of whether you have needed to complete a tax return previously. Part or all of the child benefit claimed will be payable back to HMRC in January 2014 as a tax charge.
In recent days there have been several newspaper articles about child benefit claimants who are likely to face penalties for failing to register for self assessment. The link below makes it clear that as long as the tax return is completed and filed by January 2014 and the tax paid, then no penalties will arise.
If you are concerned that the above applies to you and would like some assistance in preparing your tax return then please contact me. If in the meantime if you need to register for self assessment then please use the following link:
Better understand your needs and expectations before hiring a nanny.
A well-chosen nanny will enable you to better balance your work and home life, and will allow you to feel confident that your child is in safe and capable hands – but it’s important to have a basic understanding of what you want and expect from a nanny before you arrange any interviews or agree to hire anyone.
Let’s take a quick look at some important questions you need to ask yourself.
What responsibilities will the nanny have?
Before a nanny is able to accept a position, they’ll require knowledge of their full and expected childcare duties and responsibilities. So you’ll need to think very carefully about what services you require.
Sit down and come up with a list of all the duties that you’d expect the nanny to take care of. Some days may require that your nanny cook meals for the children, for example. Responsibilities could also include going food shopping, or running other small errands when you’re too busy to perform them yourself.
What is your weekly schedule, and how much can you afford?
Rather than asking your nanny what they can and can’t do, it’s much easier to be open and honest with them about your needs, and what you can and can’t afford.
Think carefully about your weekly schedule and work out which services you’ll need on each day. That way you’ll be able to come to an agreement much quicker, and your nanny will have a clear and reliable schedule to work around.
Are your needs going to change?
It’s normal for a nanny’s role to change as your children grow, so it’s important to understand how, and in what way, these changes will occur.
Are your working hours likely to change in the near future? Perhaps your children’s move to a closer school will mean that they no longer need to be driven to, or picked up from, school every day.
What are your views on caring?
Parents differ greatly on their views to childcare and discipline, and so you shouldn’t expect your nanny to uphold your views if you haven’t previously communicated them.
It’s a good idea to think about which actions you approve and disprove of. What’s an appropriate response to good and bad behaviour, and what values would you like your nanny to instil in your child?
It can be difficult to come to any firm conclusions, but it’s important to pass on your philosophy and parenting practices as best you can.
What skills and attributes to look for in a nanny.
Many parents find that hiring a nanny is a great way to provide and care for their child, but many first time nanny employers aren’t fully sure of what to expect from their nanny and find it hard to tell whether or not they’re doing a good job.
So let’s take a look at some of the most important aspects of your nanny duties.
1. They arrive on time
Arriving on time isn’t just an indicator that your nanny keeps a close eye on the time. It also shows you that she’s reliable and that you can depend on her to be there and care for your child.
And if your nanny can’t make an agreed time for any reason, they’ll make sure that they let you know as soon as possible, so you have time to make alternative arrangements.
2. They let you know what goes on
A good nanny will always keep you informed as to how they spend their day when caring for your child. They’ll fill you in with all the details, any problems or any issues either by making time to talk with you, or by filling out a daily report that you’ll be able to check.
3. Cleanliness is a priority
Unfortunately, getting messy and disorganised every so often is what childcare is all about. So it’s always a good sign to see that your nanny is spending time nurturing your child’s creativity and having fun with paints and crayons.
But things should always be clean and tidy afterwards, and inclusion of your child in the clean-up is a great way to promote safety, cleanliness and hygiene.
4. Things rarely go wrong
Accidents and mishaps are part of life. They’re unavoidable and occur whether you choose to hire a nanny to care for your child or not.
But a good nanny will go out of their way to reduce how often they occur. They’ll take extra precautions and go out of their way to make safety a priority.
5. They’re not afraid to ask for advice
Don’t think that your nanny is inexperienced because they come to you for advice. Every child is different, and who better to ask for help than those who’re closest to them?
Asking for help and advice shows a willing to collaborate and include you in your child’s care.
6. Your child is a happy child
Your child coming to you and talking about the activities they got up to with your nanny is a great sign that you child and nanny are bonding and building a relationship.
But don’t just talk to you child. Take time to speak regularly with the nanny to see how they’re getting on. If they’re happy in their role, the chances are that your child is happy too.
You are a family with young children, so you decide to employ a nanny to help you take care of them.
It should be very simple.
But there is a lot of confusion about how a nanny’s salary should be agreed.
It used to be that nannies were classed as ‘domestic servants’, and as a result they received a net pay. This is a far cry from nannies today who are professional and well paid but this way of working continues to this day, with nannies still largely being employed on a ‘net pay basis’.
But what’s the different between gross and net pay ?
Gross v net pay
When you apply for a job in the UK, the salary figure you’ll be quoted is normally the ‘gross pay’ amount, and your employer will deduct tax and national insurance from this figure before making the payment of a net salary to you.
Essentially, setting out an employee’s salary in gross pay makes things much easier for the employer. They’re able to work out their total costs with the knowledge that there will be no extras. However, employers should bear in mind that even if they quote a gross salary, they will be liable for Employers National Insurance in addition to the gross salary (in effect an employment tax).
Net pay, on the other hand, is the amount that an employee takes home after deductions have been made for PAYE and Employees National Insurance. Most professions, other than the nanny profession do not quote salary on a ‘net pay basis’.
A family looking to hire a nanny need to understand whether they are offering a gross or net salary and that this is fully understood by the nanny.
Even if this is understood, if they offer a net salary, they will still find themselves liable for the costs of PAYE, Employees NI and Employers NI. This may also include unpaid tax from a previous tax year which is adjusted via the nanny’s tax code, even if it falls outside of the time of their employment.
Complications can arise if the nanny has more than one employment as if the employer is not careful the other family may end up with the full personal allowance leaving one family with a large tax liability. Taxing Nannies always recommend sharing the personal allowances between the employments, and can sort this out on behalf of one or both employers.
There can also be issues if the nanny happens to have a student loan, where it is the responsibility of the Employer to deduct the repayments from the nanny’s salary and pay it over to HMRC with their liabilities for PAYE and NI.
Whichever method is chosen the parents will need to report PAYE in real time to HMRC (RTI), which means submitting information regarding payments of salary and deductions of tax and NI each time you pay your nanny.
Wouldn’t cash be easier?
You can pay your nanny cash but you are still required to register as an employer and pay over the relevant deductions.
If you are one of the thousands of parents in the UK who do not declare your nanny as an employee, you could potentially open yourself up to heavy tax penalties from HM Revenue & Customs.
An easy way to ensure your nanny’s payroll is kept in order is to enlist the help of a specialist nanny payroll company. They’ll help you better organise the payment, and ensure all tax and relevant deductions are paid, with the details of the salary payments being submitted every week.
Find out how Taxing Nannies can help you better organise your nanny payroll. Contact us today on email@example.com, telephone 020 8882 6847 and receive the nanny salary help and advice you need.
We have now had confirmation from HM Revenue & Customs that Real Time Information will now become obligatory for all small employers from April 2013.
The following is a summary of the main implications of Real Time Information. Taxing Nannies are prepared for the implementation of RTI and we will have systems in place to manage RTI and to help employers comply with the new regime.
1. An employer will be required to inform HMRC electronically every time a nanny is paid, as to the salary and tax deductions, ie weekly, fortnightly, 4-weekly or monthly. Even if a nanny is on unpaid leave or on maternity or sick leave, HMRC will need to be informed.
Taxing Nannies will continue to have the facility to continue to process weekly and fortnightly nanny payslips but will be recommending to our clients that they change to paying their nannieson a monthly basis when RTI is introduced. This will be for 2 purposes; to give more lead time to our clients to provide any changes in salary details, and to reduce the number of submissions to HMRC for the year (from 52 to 12) and hence reduce any potential penalties (see below).
2. The payment information of every nanny will have to be recorded with HMRC even if the employee earns under £107 per week and no tax or national insurance is paid.
This will result in far more employers needing to run a nanny payroll , who currently do not have to deal with the PAYE system. Please therefore mention this to your friends and colleagues. Taxing Nannies will be happy to assist any employers in this position.
3. The information must be filed no later than the date the employee is paid or the employer will be fined. The penalty regime has not yet been announced but it is thought it could be £100 for every late submission.
Taxing Nannies’ systems will ensure that the pay information is submitted to HMRC by the required deadlines, provided that we have the information to do so. The penalty regime will mean that there will be far more onus on employers who deal with payroll themselves, to ensure that their nanny pay details are filed by each payment date.
4. When the information is submitted to HMRC, they will be matching the nanny payroll details to the information they have on file for the employees.
If HMRC are unable to match the details of the nannies to their records the information will be rejected. It will therefore be imperative that all the nanny details submitted are correct particularly foreign names that must match to official documents including whether a name includes a hyphen or a dash.
Please note that contrary to some press you may read, employers will be able to continue to pay their nannies a net salary if they so wish under RTI, and HMRC have confirmed that we will be able to continue to split tax codes for nanny shares from April 2013.