Can a nanny be self employed?

My friend is employing a nanny who will work at least 40 hours a week for them (but no one else). She will also get live in accomodation as a benefit in kind. She believes she has a contract that will entitle her to self employed status.  Are my friends not liable for the tax and NI on the above?


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Your friend will soon find that most nannies just do what they like, where they like, when they like and however they like.  The purported self-employment contract's just the thin end of the wedge!

Thus there's generally a complete lack of control over your average nanny, meaning that they can't possibly be engaged under a contract of service.

In order for there to be a contract of service (employment) there needs to be a master/servant relationship, which requires there to be an irreducible minimum of factors present; personal service (ie there can't be an unfettered right to send a substitute) and control over the where, when and how things get done, sufficient for the engaging party to be the other party's master.

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19th Dec 2012 16:23

This from the HMRC website

Who counts as an 'employee'?

Sometimes it's very easy to decide whether or not someone is your employee. For example, if you take on someone who has replied to your advert, where they follow your directions and work only for you, they will almost certainly be your employee. On the other hand, if you buy services from a business that has several employees and works for several customers, that business is the employer, not you.

Special rules apply to workers supplied and paid by agencies, which mean that the agency has to operate PAYE. If an agency supplies someone to work in your home and you (not the agency) pay the worker, contact HM Revenue & Customs regarding PAYE.

There are also special rules for deciding if someone is employed or self-employed. This is called their 'employment status'. Read our related guide below to find out more - if they are self-employed you don't need to worry about operating PAYE. 

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I work with a nanny agency ...

all long term nannies are employed under PAYE by the family. Sometimes they place freelance ones who cover very short periods with a variety of different engagers and these are sometimes self-employed but more likely employed by the agency.

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24th Dec 2012 17:30

really self-employed??

I've considerable experience of nannies and it is typically the "employer" who tells them they have to be "self-employed" to save themselves the cost of employers' NI and of doing a payroll.

It is not a choice. Do you really want to hand you children over to someone and say that's fine do as you like even while living in our house - no master/servant relationship, no obligation to turn up and do the work, the right to send your mate along to look after the kids if you fancy a day off..........

If you treat the nanny with respect and employ her (or him) properly then you'll get someone who behaves with respect to you. Same as with any job. That's how we always did it and we have never had any of the nanny "horrors" others seem to have done.

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