Self-employed nanny

Whether or not a nanny can be self-employed is a question posed by families and nannies alike. Both parties must be clear as to their rights and obligations before entering a contract and therefore an understanding of employment status is vital.

Nannies in the UK often need to be employed rather than work under a self employed status.

‘Employed’ vs ‘Self-employed’

Under current HMRC rules, for a person to be considered self-employed, they must:

• At their own expense, be able to hire somebody else to do or help with their work.
• Be able to decide where to provide their services as well as how, when and what they do.
• Regularly work for a number of people.
• Risk their own money and correct unsatisfactory work in their own time at their own expense.

This list is by no means exhaustive, but it is easy to see that the points above do not easily translate to the work of most nannies.

Conversely, HMRC guidance for a worker to be considered employed includes:

• Being told what work to do, when and how to do it
• Being paid hourly, weekly or monthly
• Having to do the work themselves with no sub-contracting
• Having the possibility to earn overtime or bonus payments

These are more closely aligned with the expectations of a nanny, particularly those who work full-time for one family. Typically, in this scenario, the nanny would be employed by the family who take on the role of employer and become responsible for everything relating to employment law, such as overseeing tax and national insurance contributions, pension plans and details such as holiday and sick pay.

However, it is still possible for a nanny to be registered as self-employed. For example, if a nanny finds themselves working in a series of temporary positions, or for several families at once, (perhaps doing the job of a childminder or maternity nurse) they could register themselves as a self-employed nanny. This would mean they take on the responsibility for declaring tax and national insurance payments for themselves, along with other duties consistent with being self-employed.

Self-employed nanny status may be subject to change depending on the positions a nanny accepts. A longer-term role with one family following a period of temporary positions could change the way HMRC views employment status and the onus is on the family as the potential new employer, to check that their nanny has the correct classification.

What do families employing nannies need to know?

Any family looking to hire a nanny is responsible for checking with HMRC as to whether their nanny can work for them on a self-employed basis, or must become their employee. Failure to do this can result in hefty fines.

Thankfully, if becoming an employer feels daunting, Little Ones can provide extensive advice and assistance and can take care of HMRC registration and the associated HR admin. This offers families the security of knowing that they are always the right side of employment legislation whilst ensuring that our nannies receive the protection and benefits which come with being an employed member of staff.