If you employ a nanny in the UK and you pay him/ her more than £97 per week (tax year 2006/2007) you have the same legal responsibilities as a commercial employer and the law requires you to:
 Register as an employer
Set up and operate a PAYE (Pay As You Earn) scheme on your nanny's behalf
Keep tax records on her behalf
Provide your nanny with regular payslips
Provide her with an employment contract
Pay regular income tax and National Insurance Contributions
Pay employer's National Insurance Contributions
File an employer's annual tax return
It is less daunting than it sounds, you can contact your local Inland Revenue who will send you all the necessary paperwork. However another option is to use a payroll agency who will manage all the paper work for you, particularly those that specialise in Nannies. We recommend you use Nannytax, to take a look at the entire site click here or if you would just like to use the Nannytax calculator - Nannytax Calculator
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