As an employer you will undertake responsibilities dictated by law some of which are covered below.
PAYE and National Insurance Contributions:
We have teamed up with Nanny Tax, a bespoke service who will assist you with payroll services, legal obligations pertaining to employing a nanny – see: www.nannytax.co.uk
You do not need to use this dedicated service and may wish to do it independently but are obliged to register yourself as an employer & set up and operate a PAYE scheme on behalf of your nanny. You are required to provide your nanny with payslips that indicate PAYE and NI contributions made on their behalf .
As the employer you will be required to pay employers NI which contributes towards the employees nanny’s Statutory Sick Pay, Statutory Maternity Pay, unemployment and state pension benefits. Additionally annually you will be required to file an Employers annual tax return. Those that do not declare their employees earnings are committing a criminal offence and the risks involved thereof.
As an employer you should ensure that you have Employer’s and Public Liability insurance cover. If the nanny is to have the use of a car to preform her duties they must be appropriately insured. Employers are responsible for their employees while they are doing work-related activities or are traveling as a result of a work assignment. If you require the nanny to travel an employer would be wise to provide travel insurance for employees that are assigned to do some traveling, since the employer is ultimately responsible in the event that something happens to the employee. Should an employee have an accident or suddenly get sick during the trip, the employer will have to pay for the hospitalization and doctor’s fees, as well as any emergency transport back to the employee’s country of residence.
The same goes for other eventualities, such as cancelled or delayed trips, personal liability and lost baggage.
Pensions- Auto enrollment
The Government is trying to minimise its outgoings in the future, and has come up with the Automatic Enrolment Regulations in order to encourage employees to pay into a pension pot (an Automatic Enrolment Scheme).To provide further encouragement to employees, employers are also required to pay a minimum percentage (eventually increasing to 3%) into their employees’ pension pots. These Regulations commence on 1st October 2012 for the largest employers and will be phased in over the next few years for smaller employers. The starting date for each employer is based on the number of their employees as at 5th April 2012 and their PAYE reference number. Your starting date for the new pension regulations is known as your ‘staging date’ and can be obtained by using the timeline tool available at: http://www.thepensionsregulator.gov.uk/employers/tools/staging-date.aspx
The contributions required under the Regulations will be ‘phased in’ following your staging date, but will eventually rise to a minimum of 8% of qualifying earnings, of which at least 3% must be contributed by the employer. Up to 4% may need to be contributed by the employee, with the remaining 1% contributed by the Government (i.e. 20/80ths of the employee’s contribution – due to the Income Tax relief given at source).