What are ‘Benefits in Kind?
As a nanny employer, if you offer additional benefits or ‘perks’ for your nanny, you will need to report these annually to Nannytax so we can report them to HMRC, as part of your nanny’s total earnings as they will be taxable. Nannytax will complete a PD11 form, which lists the benefits and expenses for the applicable tax year, and return it to HMRC by the start of July. With penalty charges for late PD11 forms and for late payments to HMRC, it’s important to inform Nannytax about any benefits.
What is considered a ‘Benefit in Kind’?
To help you, we’ve made a list of the most common benefits our nannies receive (although if you’ve been providing your nanny with a benefit not mentioned below, please do contact us to confirm if this needs to be declared):
Most Common Nanny ‘Benefits in Kind’:
• Nanny Public Liability Insurance
• Medical Insurance
• Interest Free Loans
*A car is not a taxable benefit if your nanny only uses it during working hours (such as doing school pick-ups and drop offs). If your nanny is allowed to use the car out of working hours - to drive to work for example - then it is considered a ‘Benefit in Kind’ and will need to be reported to HMRC.
*If the accommodation you have provided for the nanny has a separate front door and separate metering for gas, water and electricity, it is considered a taxable benefit and will need to be reported as a ‘Benefit in Kind’.
Who pays the Tax for ‘Benefits in Kind’?
As long as a Gross Wage has been agreed then tax is deducted from the nanny’s salary.
As well as tax there will also be a Class 1A National Insurance charge for the employer. For more information on the importance of agreeing a gross salary you can find further information on our ‘New to employing’ page (https://www.nannytax.co.uk/help-for-employers/new-to-employing).
How do I report my nanny’s ‘Benefits in Kind’?