Can I be Self Employed
We are often asked if nannies can be self-employed and therefore sort out their own Tax and National Insurance. Under HMRC rule nannies cannot generally be classed as self-employed for the reasons set out below.
However, if you were to call HMRC and ask them to register you as self-employed, they will allow you to. This is because they will allow anybody to register as self-employed, but being allowed to register as self-employed is not the same as being able to be self-employed.
Additionally, it may be that you are self-employed for one job this does not mean that you can be self-employed for all jobs. For example, you may be a self-employed agency worker and then have another job as a nanny on payroll. Your employer should do an assessment when they take you on to check whether you should be self-employed or an employee for that role. You can also fill this in to check for yourself when you start a new job, this is called the Employment Status Indicator and can be found here.
If you look at the below summary, you will see that the sort of work carried out by a nanny is considered 'employed' work. You can also be an employee for many different companies one time, there is no upper limit on it and the great thing is that so long as you qualify you would recieve Statutory benefits from each employer separately. For example, if you work for 5 families, each one day per week and you are paid £120 per day gross by each family. If you would receive 5 separate payments of Statutory Sick Pay if you were sick and Statutory Maternity Pay if you have a baby.
A worker is considered ‘employed’ if they:
- have to do the work themselves
- can be told at any time what to do, where to carry out the work or when and how to do it
- can be moved from task to task
- are paid by the hour, week or month
- can be paid overtime or receive bonus payments
A worker is considered ‘self-employed’ if they:
- can hire someone else to do their work or engage helpers at their own expense
- risk their own money
- provide the main items of equipment needed to do their job, not just the small tools that many employees provide for themselves
- agree to do a job for a fixed price regardless of how long the job may take
- can decide what work to do, how and when to do the work and where to provide the services
- regularly work for a number of people
- have to correct unsatisfactory work in their own time and at their own expense
***Please note that these lists are not exhaustive.***
Exceptions: When might a nanny be self-employed?
As nannies generally fall into the first list, they cannot be considered self-employed. However in some cases HMRC do grant nannies self-employed status, for example, if the nanny works in a series of temporary positions, or works for three or more families at the same time (in which case she would have to register with Ofsted as a childminder) - but don't forget you could be an employee instead which is far better for you. The nanny should contact HMRC directly for approval if she requires this. HRMC will assess each situation individually.
Who Is Responsible?
Each new family should complete the HMRC Employment Status Indicator to decide whether the nanny should be their employee or can be self employed for the job. The onus for this is always on the employer and it is the employer who can be fined heavily by HMRC for not doing this correctly.
HMRC Employment Status Indicator http://www.hmrc.gov.uk/calcs/esi.htm