Being Self Employed as a Nanny

A common question asked by both families and nannies is whether a nanny can be self-employed. The clearest answer is ‘no’, with some notable exceptions. Here we provide some guidance to being self-employed as a nanny.

What is the Difference between Being Self-employed and Employed?

Almost all legitimate British nannies in full-time work for one family are employed by them. This means that the nanny works as an employee and the family act as their employer as determined by the nature of the role a nanny does for a family. The family are therefore liable for providing a contract of employment and overseeing tax, national insurance contributions, any pension plan or benefits the nanny may receive, sick pay, holiday pay, maternity pay and all other things pertaining to employment law.

Nevertheless in certain circumstances, nannies may sometimes also opt to be self-employed. This means that the nanny is responsible for declaring his/her own tax, NI payments and meeting any other costs associated with time off work or being self-employed.

When can Nannies be Self-Employed?

The government request that certain criteria should be met for being self-employed and these include the following:

• You can have jurisdiction over the job you do.
• You are able to sub-contract or ask someone else to do the job if you are not available or able to do it.
• You can fix a set price for the work you do.
• You are able to work for a number of people on a regular basis.
• You can provide your own equipment to carry out the work.
• You finance your own employment.

Because this list of criteria doesn’t easily meet the role of being a full-time nanny, it means that any nannies who have secured self-employed status are working in temporary positions – for instance as maternity nannies, or on an ad hoc basis. Even then, the government may need to be persuaded that any temping work taken on is in regular supply, and not merely justifying a nanny who might be working part-time for two or three families.

Registering as Self-employed

If you are interested in being a self-employed nanny, you will first need to register as such. To do this, you have to contact Her Majesty’s Revenue and Customs (HMRC) and ask to register as self-employed. To meet current HMRC criteria, your title will probably be either Childminder or Maternity Nurse, as these specific roles are accepted as being operable in a self-employed capacity.

Changing Jobs, Changing Status

If a nanny has been self-employed in continuous temporary employment, and then applies for a longer-term position with one family, they must check that their self-employed status is still legally applicable. It is also important that the family, as their potential employer, checks the situation, and requests written confirmation from HMRC or they could face a penalty. Self-employment which has been granted for one type of nanny job may not carry over to a new one and it is the employer’s responsibility to verify the correct status of their nanny.

To be or not to be … Self-employed as a Nanny

With very few exceptions, as explained above, British nannies should always be employed by the family they work for. If a family requests that a nanny register as self-employed, it must be questioned. As an employee, a nanny should receive regular payslips (monthly or weekly) clearly showing the NI and tax deductions from their gross wage and detailing the resulting net wage – plus at financial year end, a P60 showing total annual earnings and deductions. If this is not the case, the nanny must investigate the reasons why and make sure that the family has registered with HMRC as an employer.