Expenses
You as an employer may need to reimburse the nanny for certain expenses that she may incur when performing her duties, for example car travel.
We are more than happy to advise our clients on the payment of expenses to their employees.
Not knowing the rules that the revenue applies to the payment of expenses may cause you to incur unexpected and undue tax liabilities.
Examples of allowable expenses would be travelling.
If the nanny uses her own car to take the children to the doctor's for instance, this is considered to be "business travel" and therefore is not subject to PAYE and NI contributions. You would allow the nanny to claim 40p per mile up to the limit of 10,000 miles and then 25p thereafter in any fiscal year. Note that only the actual "business travel" is a non taxable payment. The mileage that the nanny drives to and from her home to work does not come under this heading and is therefore taxable. A proper log of the mileage paid to the nanny must be kept by the employer.
Other expenses:
The cost of entertaining trips and activities can be paid. Avoid giving the nanny an allowance to cover unspecified costs. Our advice is to pay only the actual cost of travel, food, entertainment tickets, etc and instruct the nanny to keep and hand in the receipts to support the claim.
