Budget, Nannies, and Nannies’ wages!
What is happening to the tax free allowance?
How does George Osborne and his Budget affect you?
Currently, the tax free allowance for most people is £10,000 and is already set to rise to £10,600 in April. The centrepiece of the Budget this year is the plan to raise the tax-free allowance from £10,600 to at least £10,800 (this will come into effect next year) and then to £11,000 the year after. This first increase would give as much as £160 a year to those that pay the basic rate.
What does this mean for nanny employers and nannies?
For nannies to reap the benefits of this change, it is important to consider the importance of discussing wages in terms of gross salary as this change will see an increase in what nannies take home if their wage is calculated on gross figures. If their salary is calculated in net figures, that figure could remain the same whilst tax and NI contributions payable by the employer would drop so only the employer would see the tax savings, not the nanny. Nannies will see a considerable positive change to their tax free allowance providing that a gross agreement is in place.
This information is from Nannytax. (www.nannytax.co.uk) I hope that you have found this blog informative and interesting.
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