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Middle class parents resorting to childcare ‘black market’

20th May 2015

The impact of auto-enrolment – the mandatory workplace pensions being phased in by the government over the next few years – will stretch to parents hiring a nanny. Many fear that the additional costs, estimated to be £350 per year on the average London nanny salary of £40,000, will tempt parents to fly under the radar – opting to pay cash in hand.

Agencies are reporting that a majority of parents are unaware of the impeding changes, despite a significant advertising campaign by HMRC.

In addition to the administration and financial burdens of auto-enrolment, parents employing nannies are also excluded from claiming the £2,000 employers allowance currently in place against their employer’s NIC costs.