Paying for childcare cash in hand - what's the view? Post Reply

[firsttimerSW11]

The OP asked for views, I'm simply stating that I personally don't have a problem with it if the nanny was amenable. In most industries, staff are paid from pre tax income as a tax deductible exense. Having to pay for a nanny from net income to me is galling.
I do hasten to add, I haven't done so myself, but there are plenty of people in the neighbourhood who do. Just because they haven't stated their views on NVN...

[orderaboveall]

I do not think this is morally right. Childcare is a job like any other and all nannies/childminders deserve a good contract with paid taxes.

[nanny_kitty]

It's illegal and the nanny should turn down the job.

I had an experience via a very well known London nanny agency whereby they tell nannies that parents try to do this and not to accept it. I had many interviews with them and found what I thought was the perfect fit. The family then tried to pay me half my salary in cash. I halted the interview (I'd met them three times by this point) and asked them if they'd be prepared to accept this from their employers. I informed the agency and turned down the job based on this - the mother later texted me a torrent of abuse. People who do this generally do not view nannies as career professionals (I choose not to work in a preschool and nanny instead) and may exhibit other undesirable attitudes towards their nanny in future. Steer clear.

[Motherslittlehelper]

hmmm, I bet nearly all that are posting here pay their cleaners in cash and don’t see a problem with that.

The amount the cleaner will accumulate in a week is probably very similar to the nanny.

Or have I missed something here ?

[Beancounter]

If the cleaner works for a number of people and submits an invoice that’s ok. Can’t be caught under IR35. Cleaner responsible for own tax. Nanny works for one employer so should be paid paye. HMRC fully aware of abuses.

[sgmitch]

I hope this nanny turns down the job.

The employer is displaying dishonest behaviour before the job even starts. This is a sign that things could get worse. Of course it's not a guarantee, but it's a warning sign. Now suppose the employer does something worse in the future (doesn't pay as promised, acts inappropriately, etc.) and the nanny needs to report it. I can't imagine her credibility with the police and courts will be as strong once they discover she has been complicit in this payroll crime from the beginning.

Asking an employee to lie shows a lack of respect and ethics. And when there is no respect in the workplace it's usually just the tip of the iceberg.

[TFP]

personal view - really not good. i suppose it's a matter of degree, e.g.

best - all on the books;
next best - base hours above board & then odd bits of overtime, babysitting, etc cash in hand;
[etc]
worst [seriously morally wrong if the employers are leading anything vaguely approaching a luxurious lifestyle, I'd happily shop in anyone who I knew was doing it] - all cash in hand.

[this_is_cat]

And I'd love to know from AbbevilleMummy why on earth she thinks I as a taxpayer should contribute to the cost of her nanny by making it tax deductible.

Because other forms of staff are tax deductible - drivers, PAs etc

It is often pointed out that there is an inherent sexism in a system which makes the sort of staff typically employed by men tax deductible, but those more typically by women not so

As long as the system allows tax breaks for people who can’t be bothered to take the tube or a cab, I can’t get worked up about people playing the system to get the same advantage when employing a nanny to allow them to work and pay tax

[NVNV]

     

[sgmitch]

I'm not a tax expert but I would think HMRC would frown upon an individual deducting the expenses of a driver to drive him around for personal reasons or deducting the expenses of a personal assistant helping out with non-business tasks. I realize it's a tricky topic (drivers at work or PAs at work helping with the occasional personal task). But don't you suppose that anyone you know who is employing these people for primarily personal tasks (and deducting the expenses) is probably taking liberties with the law?

It would be like deducting your dry cleaning bill because it's the clothes you wear to work. If a company deducts cleaning expenses for company-owned factory uniforms perhaps that is one thing. If it's your personal clothes you wear every day to an office job cleaning is probably not deductible. Again, I'm not an expert and I am interested in other views. I can just tell you my accountant always advised me to pay my nanny from my post-tax personal income and would advise the same for a personal driver etc. He would also advise the proper payroll requirements for the sake of the nanny and the law. I'm just bringing this up because nanny expenses come up more often than personal drivers therefore I think there it is more closely monitored by HMRC. And in my limited sample size I can say that I know many people with nannies but no one with a driver. Hopefully this is numbers (not sexism) driving the focus by HMRC to insure the law is adhered to with regards to nanny payroll.

[NVNV]

      

[sgmitch]

I certainly agree that childcare is a necessary condition for most of us to do our job. It does seem odd that one cannot deduct childcare expenses required while off on a business trip however one could choose to spend as little or as much on meals and hotels and it would all be deductible because it's "business related."

I suppose the 15 and 30 free hours is supposed to address this a bit. I think most people would argue it doesn't but perhaps that's the goal. I think many of us feel in the same boat here.

[NVNV]

    

[njm123]

The nanny should refuse to work for an employer who isn’t prepared to pay her correctly; it sets a bad precedent and the employer may start to behave unfairly or meanly in other ways too. I am not sure you can say the lack of childcare tax deductibility is sexist. The family unit not just the mother benefits from childcare to allow both parents to work (or single parent of whatever gender or none). Families with children get child benefit (up to a certain income) and the children get education and healthcare paid by the system, which childless people contribute to but don’t get the benefit of, so isn’t it swings and roundabouts in a way?

[pie81]

I agree that employers who take this approach are likely to be bad employers in other ways too - they clearly don't see the nanny as a proper employee with the same employment rights that they expect themselves. Avoid. And if she is brave enough, report.

I do agree that childcare should be a tax deductible expense but that's a completely separate issue from how nannies should be paid.