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Cash In Hand
28 May

There Could Be A Black Market For Nannies As A Result Of Auto Enrolment

 Cash In Hand

The introduction of auto enrolment has so far only affected larger companies, but as smaller and smaller firms need to comply with auto enrolment we could see some employers trying to avoid paying into pension pots – such as those who hire nannies.

 

Anyone who employs even one single worker will have to comply with auto enrolment before 1st April 2017 (and no, it won't be an April Fool's). It is for that reason that fears are developing that nannies could be hired in a black market designed to avoid the need to pay into their pension pots.

The warning has come from childcare agencies, who predict that cash-in-hand payments could become the norm in some cases in order to avoid the need for auto enrolment compliance.

Parental Choice’s director Sarah-Jane Butler told the Financial Times that: “The black market for cash-in-hand nannies who don’t go through payroll will definitely grow.A lot of parents may reduce the salary of the nanny or do half pay on the books and half cash in hand.”

It has been estimated that the cost of auto enrolment for employers of nannies will be £500 extra per year, which will rise to £1,100 when auto enrolment contribution levels rise in 2018. This is why parents are expected to either avoid going through payroll, or else reduce the basic salary to cover the costs.

For more information about the implications of automatic enrolment, please check our Auto Enrolment Advice page here.

 

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Photo credit goes to Gatanas 

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