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Self Employment as a Nanny

Updated: Jul 20, 2023


Can a Nanny Be Self-Employed?


Frequent discussions occur with both clients and candidates regarding the possibility of a Nanny being self-employed, a topic which also frequently appears on numerous online forums. Becoming self-employed allows Nannies the opportunity to enjoy the flexibility and autonomy that comes with being their own boss. Many Nannies are actively seeking ways to become self-employed in order to control their work schedules, rates, and clientele. Additionally, families are curious about whether or not a Nanny can be self-employed. In this article, we will delve into the potential avenues and factors to consider for self-employment.


Indeed, it is feasible for a Nanny to be self-employed. However, certain conditions and requirements must be fulfilled to ensure legal compliance and a prosperous self-employed career.


An individual is usually seen as an employee if they:


- Work a specific number of hours

- Have to do the work themselves

- Can be instructed on what, where, when, and how to do their tasks

- Can be assigned to different tasks

- Are paid hourly, weekly, or monthly

- Can earn overtime or bonuses


On the other hand, a person is usually seen as self-employed if they:


- Can pick their own work hours

- Can send someone else to do the work or hire helpers at their expense

- Can choose what tasks to do, how and when to do them, and where to offer services

- Frequently work for multiple clients or businesses

- Supply most of the necessary equipment for their job, not just small tools used by employees

- Agree to complete a project for a set price regardless of time spent

- Must fix unsatisfactory work on their own time and at their own cost


Generally Nannies typically aren't self-employed. The majority of people seeking a Nanny require set hours and only want their Nanny to care for their children and decide what activities and tasks are to be done. On the other hand, a childminder or a Maternity Nurse is usually self-employed.


If you do become a self employed Nanny then there are certain conditions and requirements that must be met to ensure legal compliance.


1. Register as Self-Employed

To establish yourself as a self-employed Nanny, you must register with HMRC within three months from the start of your self-employment. Failing to do so may result in penalties. You can register online through the government website (gov.uk).


2. Tax and National Insurance Contributions (NICs)

As a self-employed individual, you will be responsible for filing your own tax returns, accounting for your income and expenses, and paying your tax bill. You will need to keep accurate records of your income and expenditures throughout the tax year (6 April - 5 April) and complete a Self Assessment tax return. As a self-employed Nanny, you'll also be required to pay Class 2 National Insurance Contributions (NICs) if your annual profits exceed £6,515 (2021/22 rate). If your profits are over £9,568 per year (2021/22 rate), you'll need to pay Class 4 NICs as well.


3. Insurance

It's essential for self-employed Nannies to have appropriate insurance coverage. Employers' liability insurance is not required since you'll be working independently rather than employing others; however, public liability insurance remains important. This protects you financially against any claims made by clients in case of injury or property damage during your care.


It is also important to remember that as a self-employed Nanny you will not be eligible for employment benefits such as holiday pay, sick pay, and maternity pay.


WARNING

If HMRC investigate and decide that a Nanny does not meet the criteria for self employment then the nanny and their employers may have to reimburse unpaid tax and pay a penalty.

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