Tax Free Childcare UK

The UK Government has published their response to the consultation on how the Tax Free Childcare scheme would work.   What will this mean to employers of nannies and to nannies themselves?

The scheme will be administered by NS&I.  So will this mean that nannies will need to register with NS&I in some way, or will NS&I use existing data held by regulators (such as Ofsted in England)?    At this stage it is unknown but personally I feel it will mean that nannies and parents will need to register with NS&I, so that payments can be made.

Child benefit number for each child will be used to confirm eligibility.  Parents who do not intend to claim Child Benefit will be required to send in their child’s birth certificate.   I would wonder how long a delay would be the result of having to send in such an important document.

Who Qualifies for Tax Free Childcare?

All parents in the household must meet a minimum income level.  This is National Minimum Wage x 8 hours.
Parents on statutory parental leave and couples where one parents is in work and the other is in receipt of credits-only Employment and Support Allowance or Carer’s Allowance, or contributory Employment Support Allowance.

From Autumn 2015, all children up to age five and disabled children under the age of 17.
It will then be rolled out to include children between 5 and 12 years old.  Details of the roll out have yet to be announced, though should by complete by Autumn 2016.
This means that if you have a child aged 9 now (March 2014), then they may be eligible at some point between September-Dec 2016, by which time they will be age 11 and could be very nearly age 12.  Eligibility will end the first week of September following the child’s 11th birthday.

Tax Free Childcare claims must be made by an individual so in a two parent household parents can choose who applies.  I wonder if it makes a difference who applies?
Employment status and income of each member of the couple will be looked at.  A couple need not be married, it is about if someone lives with someone else.

The child or children do not need to be biological, the scheme will include adoptive parents, extended family members and others who are responsible for raising a child.  The child needs to live at the same address.

Upper income limit will be set, so if either parents reaches that limit then they will not be eligible.  It is expected to be set at the same point as becoming an additional rate taxpayer.

Tax Free Childcare will only be able to be used to pay for childcare that enables parents to work.  How exactly that will be checked is unknown at this stage.

Parents will need to be in paid work, which will include self employment as well as those on a salary.  It is also intended to be claimable by parents entering paid work, though being offered to those whose paid work starts within 7 days of claiming.

Self employed parents will need to confirm that their profit (total receipts less expenditure) meet the minimum income level, each quarter (every 3 months).   There will be a ‘start up period’ of around 12 months, where the minimum income level does not need to be met, for those starting a new business.    Self employed parents can have one start-up period every five years.

Those parents who get other Government childcare schemes, such as Childcare Grant, will not be eligible.
It will also not be available for parents claiming Tax Credits or Universal Credit.

Like the existing Childcare Voucher scheme, Tax Free Childcare will require that the childcare provider is registered or approved.  In England it is therefore necessary for a nanny to be registered with Ofsted on the Childcare Register, in Scotland you need to recruit a nanny via a registered agency and in Wales the nanny needs to be on the approval scheme.

When calculating the cost of childcare, employers of nannies can use it to pay the gross costs of employment.  This is not detailed any further, so what that means I feel is unclear… does it include Employers NI, payroll admin, what about activity costs, mileage payments?   I expect it will include Employers NI and possibly Payroll Admin, though not the other costs.   I also expect that records of payments for services like payroll admin will need to be kept as evidence that the cost is totally due to employing a nanny and not for any other purpose.

What is the effect on the Childcare Voucher scheme?

Childcare voucher scheme will be closed to new applications.
Parents already in the scheme will continue in the scheme as long as they work for their current employer and that their employer continues to offer the scheme.

To be eligible for Tax Free Childcare, parents must not be in receipt of Employer-Supported Childcare, so I take this to mean that you can not be in the Childcare Voucher Scheme and the Tax Free Childcare scheme at the same time.

Depending on when you joined the voucher scheme and the number of eligible children you have, plus what your childcare costs are, you may be better off remaining in the scheme.

Childcare Vouchers are a salary sacrifice scheme.  Leaving the scheme will therefore increase your salary.  That can therefore change your entitlement to other things, such as child benefit.

How much is Tax Free Childcare worth?

Tax Free Childcare will provide 20% of childcare costs, up to a limit of £2,000 for each child.   A family with 3 children could therefore get up to £6,000 though to get the full £6,000 their childcare cost would need to be £30,000.

How will this change how nannies are paid?

Payment from the parents account at NS&I will be made direct to the childcare provider.   The parents will need to do something to action a payment.   Parents will pay money into the Childcare Account, HMRC will top that up and then it is paid to the childcare provider.   I can not see any timescale being mentioned as to how long that process takes, with Faster Bank Payments it should be almost instant but would NS&I hold on to the money for a period of time?  Will the payment systems run 24/7 or process in batches?  How long will the 20% topup from HMRC take to enter the Childcare Account following the parents paying into it?  The Government response document says “quick and efficient” it does not say “instantly” or similar wording.  So some delay is to be expected though it may only be a few hours.

Parents will be able to set up regular payments, though given changes in tax deductions this may not be that useful to parents employing a nanny, as each month’s payroll may be a slightly different figure.

Possible Complications

If you have multiple children and some of them are eligible for the Tax Free Childcare scheme and say one of them is not, then how do you know how much of a nannies salary can be paid via the Tax Free Childcare scheme?   The Tax Free Childcare account can not be used to pay for a non-qualifying child’s childcare cost.

The scheme is designed to work with childcare costs based on per-child.  A nanny is paid per family, not per child – will that need to change?

The Tax Free Childcare scheme needs to go through a legislatory process before it becomes law.

There will be a general election before the scheme commences.  Will whomever is elected still support the scheme?  If not, will it be too late to stop by that time, would it be phased out?

 

While the Tax Free Childcare scheme looks good, time will tell if it is better than the existing Childcare Voucher scheme, or if parents already in that scheme will stay in it.   Certainly those parents who are in the voucher scheme and get some child benefit will need to look at how a change in their salary will affect how much child benefit they get.

For nannies and parents there may be a need to restructure how nannies are paid.  The new scheme does not seem to mention about what happens if a family have some children eligible but others whom are not, yet all the children are cared for by the same childcare provider.    Whilst this may not apply to that many families, I suspect it will apply to those parents who currently have a child aged 9 or over and will affect parents as their currently young children get older.    Childcare is not automatically no longer needed when a child reaches the September following their 11th birthday, yet the new scheme will end at that point for that child.   Nannies may well be caring for children aged under 11 as well those aged 11 or older.

Views expressed here are mine and you may or may not agree with them.   Please do take a look at the consultation response documents to get a feel for the proposed scheme.

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Hours too long for nursery?

Today on BBC Radio4, Charlotte Crosswell was interviewed by Andrea Catherwood about her career in banking.  Charlotte Crosswell is Chief Executive Officer of the trading derivatives platform of NASDAQ in London.  She has a daughter aged 5 and went back to work when her daughter was 10 weeks old.

Listen Now via iPlayer.

Working in the City her hours were too long for a nursery.  So a nanny was her only childcare option.   For some parents, a nanny is vital to them being able to work due to the hours of work expected by their industry, commute time, global travel.  Especially for women working in the city, as Charlotte explains in the interview.  Time management – she has breakfast with her daughter, comes home for bedtime but may work in the evening such as a conference call at 8pm but won’t do a call at 7pm.

She has never had a nanny who has had a day off sick.   Nannies do not tend to take sick days unless absolutely vital, certainly I do not recall when I have taken a sick day.

It is nice to hear how Charlotte respects her nanny, realises that the getting a child to school is not that easy at times, that having a nanny has meant that she can work and have a family.

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Where to Advertise for a Nanny in the UK

Recruiting a nanny can be done via a local nanny agency, or you can do it yourself using advert in a local village store and via internet adverts.

The internet has made advertising quite low cost but there are various different places to advertise and it is hard to know if nannies looking for work in your area will be using any particular website.

Websites on which I would look for nanny jobs are:

NannyJob.co.uk Cost: £24.99 one off payment for advert, includes 4 months access to contacting users.

FindABabysitter.com Cost: From £19.95 a month.

Childcare.co.uk Cost: £19.99 a month

I would suggest you put as much information on the advert as possible, include things like the hours of work, days, salary, if you require any housework to be done, if you need someone who drives, who uses their own car. The more you put the better in my view.

Sites either charge for an advert or charge for sending messages. They have various price plans, so read cost details carefully and note that it can often be a re-occurring payment – so make a note of how to cancel it once you no longer need the service.

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Nanny Magazine

Subscribe to Nanny Magazine

In the UK we have had a mini nanny magazine as part of Nursery World Magazine for many years.  In recent years we have had Home Childcarer Magazine aimed at UK childminders and nannies.

Nannies in other countries are not as lucky, though now those in USA and anyone with an internet connection can subscribe to a magazine aimed directly at nannies.   Nanny Magazine provides advice, ideas, recipes and more.

In their launch issue, Nanny Magazine has an in-depth interview with the writers of The Nanny Diaries, recipes, articles about things to do when it snows, loving someone else’s child, advice from a nanny agency, a column by a male nanny, plus ideas for a date night with your loved one. It’s not all about what nannies do during work.

You can subscribe to the digital version (which works on a desktop/laptop computer and also some tablets – it works on iPad for example) which comes out bi-monthly.  Nannies in the US can subscribe to a print or digital version.

Subscribe to Nanny Magazine

If you fancy a quick peek at what is in the launch issue, then have a look at this: Nanny Magazine Mini Issue

 
Not read The Nanny Diaries?
The Nanny Diaries : A Novel

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Keep It Safe and Log It

Have you or the children in your care received a new bike, Nintendo 3DS, iPad, Amazon Kindle Fire, android tablet, mobile phone, Leappad, games console or indeed anything which can be uniquely identified?  In the UK and the United States the police forces have a nationwide database where you can log details of your property. Should it be stolen and subsequently found it can be returned to you.

Immobilise is a national database which is Free for the public to add details of their items.  It links with the National Mobile Property Register that police forces use to identify stolen goods and reunite them to their proper owners.

As a direct result of Immobilise there are over 250 cases a week where property is returned or information collected that assists the Police in investigating criminal activity involving stolen goods.

A child in your care may have received an MP3 player/iPod for Christmas, or perhaps a tablet computer.  These items are portable and expensive so should be protected from being lost.  Children will lose things.  With luck they will not have them stolen but it does happen.  They take something to school and someone else fancies it and takes it.  Cars and homes are broken into, opportunist thieves spot unattended items.

Whilst we can try to teach children not to leave valuable items laying around, theft does happen.   Sometimes the item will never be found but other times the item is sold on, or found in a search of a suspects home.  So logging unique identifiers of the item with Immobilise may result in the item being returned should it be stolen.

Immobilise – The UK National Property Register

Immobilize – The US National Property Register

 

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Nanny Wages Survey 2013

For more than 10 years, NannyTax and NurseryWorld Magazine have been conducting an annual survey of UK nanny wages.

As a nanny you may have completed this survey for many years, or this may be your first time.    The survey asks questions about where you are working (demographic data), a little about yourself such as asking which age range you fit in and your gender, plus how many hours a week you work.   Then the key information, how much you are paid per week.  Not sure why monthly salary is not asked, I would have thought that would have been better but maybe they feel that more people know their weekly salary.

In 1998, a daily nanny (live out) working in the home counties (so I expect that means Surrey, Berkshire, Buckinghamshire, Hartfordshire, Essex, Kent, Sussex) was getting an average of £213 net per week (gross figure unknown).

By 2012 that figure had risen to £428 net per week (just under £29,000 gross per year).  So over the years salary has doubled but over that time a lot of things have been affected by inflation.  So perhaps looking back just a few years is better, in which case 2011 £421, 2010 £422, 2009 £380.   So generally going up but with a dip in 2010.

Will 2013 be another dip or are nanny wages on the rise?   You can help find out by completing the survey, saying what salary you are currently earning.    Survey results are expected to be published late January / Early February 2014 on the NannyTax website and also in publications like Nursery World.

Take the 2013 UK Nanny Wages Survey

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MrAnchovy’s PAYE Calculator – Alternatives

UPDATE 14/Nov/13 – MrAnchovy’s PAYE Calculator is back online.

Over the past couple of years MrAnchovy’s PAYE Calculator has been a useful tool for nannies and parents to use as it did a reverse tax calculation – that is, it did Net to Gross.

It came to my attention this week that MrAnchovy’s PAYE Calculator has gone offline.  This means that nannies and parents are looking for an alternative, of which there are many, though none in my view are quite as easy to use.

Having looked at a few, I would suggest the use of the following:

iPhone App – Tax Tool 2013   This will do a Net to Gross calculation.  It does not do Employers NI, so this app is useful to find the likely gross amount for a given Net pay.

UK Tax Calculators Reverse PAYE  This is a website which will do a Net to Gross calculation.  It only has the option of entering in the monthly Net amount.

Listen to Taxman  This PAYE calculator has been around for many years and does a Gross to Net calculation, including calculating Employers NI.

As with all tax calculators the more information you give the better the result.   If you do not know your taxcode, look on your latest payslip.  If you don’t have that, then in 2013/14 tax year (April 2013 to end of March 2014) use 944L if it will be your only job.  If it will be your secondary job, use tax code BR.

Keep in mind that the nature of PAYE is such that these calculators will not be precise, so they must not be used for doing the actual payroll.  They are a good indicator of the likely figures and thus are useful in agreeing a Gross salary figure.

In April 2014 personal tax allowance goes up, so nannies on a Gross salary will see a small increase in their take home pay.  Cost to employer should stay the same though it will depend on if there is any change to Employers National Insurance.

 

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Renewing Your Ofsted Registration

Nannies who are registered with Ofsted as a Home Childcarer will be sent a renewal invoice by Ofsted around 4 weeks before renewal date.   This year my renewal invoice arrived on 16th August, with registration due to be renewed by 12th September.

There are various ways to renew your Ofsted nanny registration:

  • Online
  • Over the phone
  • By internet banking (BACS)
  • Cheque in the post

Of these I find the easiest is online payment.   You can access the Ofsted portal via https://online.ofsted.gov.uk/OnlineOfsted/default.aspx

Your invoice contains an invoice number which is used by the online payments system.  It also has a security token.  You need to enter both those into the online payments system and it will then take you through the payments process, where you can pay using debit or credit card (MasterCard, Visa, Maestro).

Once you get to the final page, use the Save As PDF facility of your webbrowser (such as Google Chrome), or use the print facility, to keep a copy of evidence of the transaction as the Childcare Voucher company may need evidence that your Ofsted Registration has been paid.

If you no longer wish to remain registered you MUST call Ofsted and notify them – 0300 1231231

 

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Ofsted Nanny Registration – CRB checks now DBS checks

Earlier this month, Ofsted updated their Guide to Registration on the Childcare Register document.

60. All Ofsted’s Disclosure and Barring Service checks are processed by Capita. Once an applicant submits an application to Ofsted they are directed to the Capita website: http://ofsteddbsapplication.co.uk. In order to apply for a check the applicant must have the Capita Organisation Reference Number. This is:
“OfSTEDP” – for those applying for or linked to a new EY application for registration. This includes everyone that makes up the registered person; the nominated person and manager of a child care setting; any staff or persons caring for children; and any household members of those aged 16 years and over who are connected to a childminding application.
“OfSTEDA” – for those applying to be associated to a provision that is already registered. This includes changes to any of the above.

61. The Capita website provides guidance on how to apply for a check including information about the online subscription service and checking ID by a ‘responsible person’ or at the post office. The childcare applicant and any individual that is required to have a criminal records check will receive their hard copy disclosure in the post.

So if you are registering with Ofsted, rather than renewing an existing registration, I think the online registration process will now direct you to the Capita website for processing the DBS check.    (If you are going through this process, please do let me know if the online application does take you automatically to the Capita website.)

You need to get your ID checked, Capita have an information sheet about that – Identity Checking Form (pdf)   The person checking your ID must have known you for at least 12 months and not be relative, plus they must be working in (or retired from) a profession in the list.

Capita says that if you do not know someone on the list, then you can have your ID checked by the PostOffice for an additional fee (currently £7.15)

Fees in general are currently:
£44 for the DBS check, £6.80 (capita e-bulk processing fee), £1.30 ID Check processing fee.  So without the PostOffice charge, its £52.10

There is also a £13 per year Update Service fee.  This means that your DBS check will go on a database system which employers can access.  This could prove to be very useful, especially if you change job quite regularly such as doing temp work.

For more information, read the Ofsted/Capita DBS Checks FAQ.

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UK Nanny Forums – Meet Other Nannies On-line

Being a nanny can be an isolating job so it can help to be able to chat to other nannies.    Nanny forums can be a good place to start as you can get to know other nannies on-line and you may get to meet some if they are local.

Some forums are targeted specifically for nannies where as other forums are used by a variety of childcare providers such as childminders, nannies and au-pairs. Forums are a great place to learn from others about latest changes to things that affect working as a nanny. For example, some of the forums can be great for learning about employment rights and keeping updated about changes to UK taxation.

When joining a new community, sit back and observe for a while. This is called Being a Lurker. Read the messages and get to know how to navigate the forum, how to write messages so that they are readable. Do not SHOUT BY WRITING ALL IN CAPITALS and remember to use paragraphs to help make things more readable.

Some forums have a special introduce yourself section but personally I avoid doing that, instead just start by adding a comment to an existing message thread. Make sure it is a current thread though, don’t dig up a message thread from a week or more ago.

You will soon have the confidence to start your own message thread on the forum, asking your own question. Do not be concerned if you do not get many replies, it is not a Get The Most Replies competition. Do not worry about thread views (some forums show how many times the thread has been read) as people like to read but don’t always have anything useful to add.

UK Nanny Forums:

NannyJob Messageboard

Netmums Childcare Providers Chat

Mumsnet Childminders, Nannies, Au Pairs etc

Do you know of any others?

Are you in another country, if so do you know of any nanny related forums?

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