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Nanny Tax > Nanny Payroll Newsletters > Nanny Payroll Newsletter 2009, November

TAXING NANNIES NEWSLETTER AUTUMN 2009

NATIONAL MINIMUM WAGE RATE

The national minimum wage rate has increased from 1st October 2009 to £5.80 per hour for employees aged 22 and over, £4.83 for employees aged 18-21 and £3.57 for workers aged 16-17. The daily accommodation offset rate has also increased to £4.51 for each day worked.

Although au pairs and domestic workers living with a family can be exempted from the minimum wage requirements this is only when they live as part of the family sharing in tasks and leisure activities on the same basis as the family. Therefore most live in nannies are not exempted from the national minimum wage requirements in which case the minimum employers need to pay are the rates stated above less the accommodation offset.

REDUNDANCY

Where an employer's situation changes so that they no longer require a nanny, the employee is deemed to be made redundant. Where the nanny has been employed for more than two years redundancy pay is payable at the following rates:

0.5 week's salary for every year worked aged 18-21
One week's salary for every year worked aged 22-40
One and a half week's salary for every year worked from aged 41

From 1st October 2009 the statutory redundancy cap (ie the maximum weekly pay that is required to be made) has increased to £380 gross. More information can be found on www.direct.gov.uk

CHECKING FOR ILLEGAL WORKERS

Following the recent case involving Baroness Scotland where she was fined £5,000 for failure to produce a copy of her employee's passport/visa details, we would like to remind our clients to ensure that they check and photocopy documentation to ensure that any prospective employee is legally employed. More information can be found on our website under "employment legislation".

Please note that taking the necessary precautions establishes a statutory defence. If you are found to have employed someone illegally you could be fined up to £10,000 per illegal worker and the employee deported.

PAYMENT OF PAYE AND NI

From May 2010 you may have to pay penalties if you make more than one PAYE payment late. The amount of the penalty will depend on the number of defaults in any 12 month period.

The first time the taxpayer defaults, they will not receive a penalty;
A second late payment and any subsequent failures in the default period will attract a penalty of 2 per cent of the tax unpaid rising to 5 per cent of tax unpaid;
Further penalties of 5 per cent of any amounts of tax still unpaid at 6 and 12 months; and
Late payment penalties will not be charged during an agreed time to pay arrangement with HMRC unless the taxpayer defaults or misuses the arrangement.

MATERNITY PAY AND MATERNITY LEAVE

We have received several enquiries concerning prospective maternity situations where the employer is concerned about the possibility of a nanny becoming pregnant. We do have information on our website and also a maternity factsheet is available from Taxing Nannies should you require more information. Please note that the employer is able to recover in advance the cost of the gross maternity pay due to a pregnant employee and Taxing Nannies are able to organise the repayment on your behalf.

POSTAL STRIKE

Unfortunately, due to circumstances beyond our control, some correspondence sent to our clients has been delayed or lost in the post. All of our clients should have received by now payslips for the month of September or the week ended 2nd October together with a letter confirming the amount of PAYE and NI due on 19th October. If you have not received this information please contact us without delay.

ACCOUNTING AND TAX RETURN SERVICES

Please note that Sara Graff, proprietor of Taxing Nannies, is a qualified Chartered Accountant and Chartered Tax Advisor. She runs an accounting practice, Sara Graff & Co, alongside Taxing Nannies, providing a variety of accounting and tax services. She would be happy to assist you in preparing your tax return or assist you with other accounting matters and if you would like further information please ring Sara on +44 (0)208 882 6847.

Please contact Taxing Nannies if you require further information.

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