loss making nanny operation

loss making nanny operation

Didn't find your answer?

Greetings,

I have a 7 month old child and have now started the nightmarish task of trying to find childcare. One of the options available is hiring a nanny, fine. But I then discovered that I will have to set up as an employer with all the usual payroll trimmings. My wife's sister also is in the same boat and the we figured the best option would be to hire a nanny for the terrible two to be minded together. My question is - as I will be an employer, could I take one step further and setup a business, hire a qualified nanny, charge the sister for example 50% of the nanny's gross wage and offset the loss that will arise against my/wife's employment income? Or should I just bite the bullet and pay the woman as normal (or man of course, I will be an equal opportunies employer) ;-)

Many thanks

Replies (2)

Please login or register to join the discussion.

By Marion Hayes
01st Nov 2011 10:22

No loss

Morning

If you did as you describe you would have to adjust your accounting profit to remove the private proportion. There would be no intention to make a profit unless you charged the sister more than the cost so any loss would be disallowable too.

There is nothing to stop you sharing the nanny and setting up one payroll. Phone the employer helpline and ask them to create a 'Domestic' or simplified deduction scheme for you if you are going to emply. They then do the hard work for you.

http://www.hmrc.gov.uk/manuals/pommanual/paye73001.htm 

Thanks (0)
avatar
By Fergs5
01st Nov 2011 11:03

Thanks for this Marion, we will probably go down this route.

Regards,

Thanks (0)