NannyMatters News Spring 2022

Another interesting year has passed and we have seen some unexpected changes in the world. We hope you and your family are keeping well and wish you an easier year ahead.

Payroll changes from April 2022

The most significant change we will see in April is the introduction of the Health and Social Care Levy. This will be collected through National Insurance contributions, with an extra 1.25% deducted on qualifying earnings for both employee and employer, reducing the employee’s net pay and increasing your costs. Employees earning more than £12,570 gross per annum are likely to see a drop in their net pay. In July, an increase to the Employee NI threshold will mitigate this slightly.

If you have agreed a net pay for your employee then both costs will fall on you as the employer. If your gross pay is based on an expected net pay rate, you might consider a pay rise.

There has been no change to the personal tax-free allowance at £12,570 but, of course, HMRC may send a new tax code that changes the amount of tax that your nanny pays, in which case you could see a significant change. Please ensure you check the net pay on your April payslip carefully and adjust your net pay transfer accordingly. Remember that employees have a legal entitlement to receive a payslip every pay day, so always forward the email on to your nanny (or print the payslip and hand it over if you prefer).

NMW from April 2022

This year sees a further increase in National Minimum Wage rates from £8.91 to £9.50 for those aged 23+:

We can’t increase pay automatically, because we may not have up to date information about hours of work. Also, there are special rules for live-in nannies, who can be paid a little less because they are provided with accommodation. Please do get in touch if you would like us to process a rise or check that your existing arrangement is compliant.

P60 forms

P60s will be issued to you before the deadline of 31st May. You must pass them on. Only current employees receive a P60 (leavers get a P45 instead).

You will need your Accounts Office Reference, which is printed in the top right-hand corner of your HMRC Remittance Report. It will be 3 numbers followed by a ‘P’ and then another letter, followed by 8 numbers.

Reminder re Employment Allowance

If you employ a carer, rather than a nanny or housekeeper, then you should qualify for a reduction in your Employer’s NI, called the Employment Allowance. This could save you up to £5,000 per year. Contact us if you think you may fall into this category so that we can explain the criteria and, if applicable, make the claim on your behalf.

If we already claim Employment Allowance for you, then we will continue to process the claim. You must tell us if you have ceased to qualify.

Extra Bank Holiday 2022

The government has announced an extra bank holiday this year on Friday 3rd June to mark the Queen’s Platinum Jubilee year, celebrating 70 years on the throne. The statutory minimum number of days of entitlement has not changed but if the wording in your contract separates the bank holidays from the other days, then they could well be due an extra day off. Please contact us if you are not sure. You may wish to acknowledge it anyway as a good-will gesture.

Fee Changes

Due to rising costs and our need to properly remunerate and train our staff, it is with regret that we will be raising our fees from 1st May 2022. It has been 10 years since our last increase. Monthly payrolls will now be £260 per year and weekly ones £310 per year. All other charges, such as the pension administration, will remain the same.