Caroline warns against failing to comply with the new rules governing pensions for nannies…
The cost of childcare is always a concern for parents but anyone employing a nanny (even if they share the costs with another family) is about to find that the cost is about to rise. This is because of new provisions which require you to set up and pay into a pension for your nanny if they are aged 22 and over, and earn over £10,000 a year. You may not see yourself as a small business but that is exactly what you are in the eyes of the regulators. The cost of providing a pension is likely to add around £500 a year to your childcare bill and this will rise in both 2016 and 2017.
Just when you have to start contributing is something of a lottery and full details of this and everything else you need to know about the scheme can be found on the Pensions Regulator’s website (http://www.thepensionsregulator.gov.uk/employers/planning-for-automatic-enrolment.aspx).
Ignore the new rules at your peril: a £400 fine will be imposed on anyone failing to comply. Don’t think you can fly under the radar either as HMRC have said specifically that they will be on the lookout for anyone trying to pay their nannies cash in hand to avoid the newly overhauled pension rules!