The Nannyplus Blog

Finances Tight and can’t afford that all important nanny payrise? – see how to maintain the harmony

May 30th, 2014

What to do when finances are tight and you can’t afford that pay rise you know your nanny deserves.

 

 

You know that you really appreciate your nanny and the wonderful work that she does -not only does she take terrific care of your child, but she’s always ready to muck in with other things, and lend a hand whenever you need her to.
She deserves a raise, but, unfortunately, it’s impossible to stretch your finances any further right now. So what should you do?

  • Be honest with her. Because you’re not able to give her the raise you want to, your first instinct may be to avoid the conversation altogether. However, it would be reasonable to suppose that if you’re thinking it’s time to give your nanny a raise, she’s thinking it too! When you avoid that subject, the chances are that Nanny will make the assumption that either you don’t value her work, or don’t feel she deserves an increase in pay. By being honest about your feelings, and telling her that your family Budget does not allow for a salary increase raise right now, you will avoid hurtful assumptions.
  • Always let Nanny know how much you appreciate her. Even if you can’t afford a raise, you can afford a handwritten card with a bunch of flowers, (or get them delivered by Interflora for more impact!), a red letter day, or even a gift wrapped scented candle.
  • Please don’t think that you should save saying a thank you for special occasions. Any time you notice your nanny going above and beyond the call of duty, let her know how much you appreciate the extra effort. When you see how happy your children are in her care, or when they have had a particularly enjoyable day with her, let her know that the work she does truly makes a difference to your family.  use those examples to point out what you appreciate about her. Nannies, like any employee in any sector, who feel appreciated on the job are much happier, and are much more likely to stay long term in their position.
  • See if any raise at all is possible.
    Even if it would not be possible to give your nanny the raise she asked for, or that the agency recommended, give her what you can. Explain that although you would like it to be more, this is all that you can afford at this time. Nannies understand that employers have financial restraints like everyone else. Any raise, even a small one, makes a difference to Nanny, and shows her that her work is appreciated.
  • Think outside the box to see if you can offer Nanny an added benefit. There are a lot of things you can offer besides a monetary raise. Could you find a way to give her some extra time off? A spa day? A beauty treatment? Could she use the nanny car for her own use, or even to make it easier to get to work and home again? A Gym Membership? re willing and able to offer.
  •  it can be given in increments, or alongside other perks.
    Try to involve your nanny in a conversation regarding her pay, and let her have the chance to share her thoughts. By being honest and open with each other, you’ll both have a clear understanding of the other’s perspective and be on the same page moving forward.

Always remember that you are fortunate to have a wonderful nanny working with your family, and try your best to keep her happy.
I hope that you have found this blog informative and interesting.
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Tax Free Childcare Scheme from Autumn 2015

May 16th, 2014

Tax-Free Childcare scheme from Autumn 2015

The Government used the 2013 Budget to announce that a new tax-free childcare voucher scheme would be introduced in Autumn 2015. Tax-free childcare was expected to provide parents with tax savings of up to £1,200 per child each year.

Following a consultation exercise, the Government has published more details about the tax-free childcare scheme, including an announcement that the scheme will be administered by NS&I rather than by existing childcare voucher providers.

The level of childcare costs covered by the new scheme has been increased since the original announcement. Initially, a 20% tax break was expected on the first £6,000 of childcare costs, providing savings of up to £1,200 per child. The scheme has now been extended to cover annual childcare costs of up to £10,000, providing savings of up to £2,000 per child.

Employers will be able to continue to set up a childcare voucher scheme until tax-free childcare is launched, meaning there is still an opportunity for employers to enjoy the National Insurance savings which childcare vouchers provide. Parents will be able to sign up for childcare vouchers until August 2015 and they can then continue to order vouchers beyond Autumn 2015, for as long as their employer continues to run the scheme. Some existing scheme members will choose to switch to the new scheme from 2015, as in some cases this will provide higher savings.

The new scheme will initially only be available in respect of children under 5, although there are plans to make it available for all children under 12 within one year.

The winners and losers

  • Tax-free childcare will provide higher savings for many parents, including the self-employed and those with high childcare costs. However, some parents are better off under the existing arrangements.
  • Parents who sign up to the current childcare voucher scheme will be able to remain in the scheme, so they will not be disadvantaged by the proposed 2015 changes. However, if they move to a new employer after Autumn 2015, they will be considered to have left the current scheme and be forced to switch to the new arrangements.
  • Some parents will not be ready to use childcare vouchers until after the new scheme starts. In some cases, these parents will receive lower savings from the new arrangements than they would have had under the current scheme.
  • The new scheme will not be available to families where either parent earns over £150,000, whereas the current scheme allows high earners to enjoy tax savings at the same level as basic-rate taxpayers.
  • The new arrangement will not provide any National Insurance savings (currently worth up to 12% for basic-rate taxpayers and up to 13.8% for employers). For some employers, this will be a significant loss, which could have a knock-on effect on the amount which they are able to spend on other employee benefits. Local authorities and NHS Trusts are among the employers who will be hit, potentially leaving a hole of hundreds of thousands of pounds in their budgets.In general, parents will only be better off under the new scheme if their childcare costs are higher than the figures shown in the table below. Parents with lower childcare costs would be better off with childcare vouchers.

Family circumstances

Level of monthly childcare costs after which tax-free childcare becomes the better option

Single parent, basic-rate taxpayer £ 389
Single parent, higher-rate taxpayer, joined childcare vouchers before 6th April 2011 £ 510
Single parent, higher-rate taxpayer, joined childcare vouchers after 5th April 2011 £ 260
Couple, both basic-rate taxpayers £ 778
Couple, one basic-rate taxpayer, one higher-rate taxpayer who joined childcare vouchers after 5th April 2011 £ 649
Couple, both higher-rate taxpayers who joined childcare vouchers after 5th April 2011 £ 521

What action should parents take?

Parents who aren’t already using childcare vouchers should ask their employers to set up a scheme now, rather than waiting until the new scheme is launched in 2015. Employers enjoy National Insurance savings from the current scheme, so it is in their interest to set up a scheme before the 2015 deadline.

Will there still be a role for employers in the new scheme?

Although the new arrangements take the onus away from employers, the Government hopes that employers will still have a role to play. Many parents use childcare vouchers as a way of budgeting for childcare costs and appreciate the benefits of their childcare payments being taken direct from salary. Employers will be able to support their employees by gradually replacing their existing salary sacrifice schemes with voluntary payroll deduction schemes. Although employers will no longer benefit from National Insurance savings, providing easy access to tax-free childcare will still allow them to enjoy the benefits of better staff engagement and higher morale.


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