We are often asked if nannies can be self-employed and therefore sort out their own Tax and National Insurance. Under HMRC rule nannies cannot generally be classed as self-employed for the reasons set out below.
A worker is considered 'employed' if they:
- have to do the work themselves
- can be told at any time what to do, where to carry out the work or when and how to do it
- work a set amount of hours
- can be moved from task to task
- are paid by the hour, week or month
- can be paid overtime or receive bonus payments
A worker is considered 'self-employed' if they:
- can hire someone else to do their work or engage helpers at their own expense
- risk their own money
- provide the main items of equipment needed to do their job, not just the small tools that many employees provide for themselves
- agree to do a job for a fixed price regardless of how long the job may take
- can decide what work to do, how and when to do the work and where to provide the services
- regularly work for a number of people
- have to correct unsatisfactory work in their own time and at their own expense
NB. Please note that these lists are not exhaustive.
Exceptions: When might a nanny be self-employed?
As nannies generally fall into the first list, they cannot be considered self-employed. However in some cases HMRC do grant nannies self-employed status, for example, if the nanny works in a series of temporary positions, or works for three or more families at the same time (in which case she would have to register with Ofsted as a childminder). The nanny should contact HMRC directly for approval if she requires this. HRMC will assess each situation individually.