Why Most Nannies Are Not Self-Employed in the UK

In almost all cases, a nanny is legally your employee, not a self-employed contractor. HMRC is very clear on this. Because you, the parent, set their hours, define their duties, and they work in your home, they are in a "contract of service" (employment), which makes you their employer with full legal responsibilities.

This is one of the most common and dangerous misconceptions for families hiring a nanny.

A candidate might even tell you they are "self-employed" and will "handle their own taxes." It sounds simpler, and many parents are tempted to agree.

However, in the eyes of UK law, this is almost always incorrect. Employment status isn't a choice or a preference; it's a legal fact based on the nature of the job. Misclassifying your nanny as self-employed to avoid your responsibilities can lead to significant backdated tax bills and fines from HMRC.

Here's why your nanny is almost certainly your employee.

The Legal Tests for Employment

HMRC and UK courts use a few key tests to determine if someone is an employee or self-employed. A typical nanny relationship almost always meets the definition of an employee.

1. Control

This is the most significant factor. As the employer, you have a high degree of control over your nanny's work.

• You set the working hours (e.g., 8 am to 6 pm, Monday to Friday).

A genuinely self-employed person—like a plumber or a freelance designer—controls how, when, and where they do their work. They are their own boss. Your nanny works for you.

2. Personal Service (and No Right to Substitute)

You are hiring that specific person for their skills and experience. Your nanny must deliver the service personally.

Ask yourself: If your nanny is ill, can they send a qualified friend in their place without you having a say?

The answer is no. This lack of a "right of substitution" is a key indicator of employment. A self-employed contractor would typically have the right to send a substitute to complete the job.

3. Mutuality of Obligation (The Wage-Work Bargain)

This is a legal way of saying you have a mutual agreement.

• You are obliged to provide and pay your nanny for their set number of hours.

• Your nanny is obliged to turn up and work those hours for you.

This mutual obligation doesn't exist in the same way with a contractor, who is only paid to complete a specific project and is then free to find other clients.

But My Nanny Says They Are Self-Employed!

This is a common scenario, but it doesn't change the legal reality. A nanny may be registered for Self-Assessment with HMRC for other reasons (e.g., they do freelance weekend work) or because a previous employer treated them incorrectly.

This does not, and cannot, transfer to your job. The employment status is determined by your specific working relationship, not by what the nanny or you would prefer.

The only, very rare, exception might be a specialist "troubleshooting" nanny or a temporary maternity nurse who works for multiple families at once on short-term contracts, controlling their own schedule. For the vast majority of family nannies, this does not apply.

The Risks of "Getting It Wrong"

Treating your nanny as self-employed when they are an employee is a form of tax avoidance. You are, in effect, avoiding your legal duties as an employer.

If HMRC investigates, the consequences fall entirely on you, the employer. You could be held liable for:

• All the backdated Income Tax and Employee's National Insurance that should have been deducted.

• All the Employer's National Insurance contributions you should have paid (this is an extra cost on top of the gross salary).
• Fines and penalties for non-compliance, which can be substantial.

You also deny your nanny their legal employment rights, such as:

• Statutory Sick Pay (SSP)
• Paid holiday entitlement
• A workplace pension
• Maternity and paternity leave

How to Be a Compliant Employer

The correct and only compliant way to hire a nanny is to accept your role as an employer from day one.

This means you must:

1. Agree on a gross salary, not a net (take-home) figure.
2. Register with HMRC as an employer before the first payday.
3. Operate a PAYE (Pay As You Earn) scheme to manage their tax and NI.
4. Provide them with legal payslips for every pay period.
5. Set up a workplace pension if they are eligible.

This is exactly what Quinn was built for.

While you focus on your family, our payroll service takes care of everything for you: From registrations and filings to payslips and payments. Fully digital, no paperwork, no stress. We make being a compliant nanny employer simple.