“Middle class families denied £2,000 nanny allowance”
Article taken from the Telegraph, 10 Feb 2014
Middle class families denied £2,000 nanny allowance
Hard working middle class families who hire nannies are excluded from a generous Government allowance that eases the burden of national insurance costs for other small scale employers.
The exclusion has lead experts to warn that, in effect, parents are being encouraged to keep their nannies and other domestic workers – such as cleaners and gardeners – “off the books”.
George Osborne set out measures intended to boost cash-strapped small businesses by introducing an employment allowance which removes the first £2,000 off the employers’ national insurance contributions – a move he described as taking a “tax off jobs”.
However the scheme excludes employers who pay people for personal, household or domestic work – such as a nanny or an au pair. Those employing chauffeurs, gardeners or care support workers will also not be eligible for the rebate which comes in this April.
Treasury sources said that domestic staff were excluded because the rebate is intended to encourage people to invest in their business and those employing domestic staff are not seen as running a business.
Parents are outraged at their exclusion, despite being formal employers, and have expressed frustration that the rebate is being denied to them despite providing important job opportunities for nannies and getting themselves back to work.
Parents have to pay for childon care out of their own taxed salary, they have to pay the nanny’s national insurance, and then on top of that,they have to pay employers’ national insurance! This is why a lot of people end up paying their nannies off the books – they simply cannot afford their full legal financial obligations.
The Association of Nanny Agencies commented that Government is getting away with sweeping the issue “under the carpet” because domestic employment is such a “grey area.”
Families are employing someone just as a small busiess owner is employing someone. They are doing the same as everyone else, putting back into the economy – so why should they not get the rebate too? We feel very strongly that the government should be encouraging people to be able to go back to work. If they did involve the domestic side of staff in their scheme it would help Families and the economy tremendously.