Ask Money: is tax-free work like babysitting legal?

mom with child
mom with child

How are part-time jobs like babysitting viewed in the eyes of the law and the taxman? The answer is less straightforward than you’d think. Her Majesty’s Revenue and Customs, the government department that collects taxes, says that “cash in hand payments … must be declared to HMRC.”

Considering this tough official stance on workplace tax evasion, paying your babysitter might actually break the law by depriving the economy of tax money. This makes sense because taxes are one of the main sources of government revenue. Without taxes, it would be impossible to pay for public education, infrastructure, government work, and more.

Nonetheless, the legal status of babysitting is very hard to pin down. Although this all sounds rather alarming, the government does make some exceptions. For example, the Childcare Act grants an exemption if care takes place between the hours of 6 pm and 2 am or for less than two hours a day.

Babysitters may run into issues, however, because of the oblique definition of childcare. The thin distinction between working as a full-time nanny and a part-time babysitter is a major reason the government doesn’t take a strong interest in people paying their childcare providers under the table. Moreover, babysitting happens in a private home rather than a public workplace, so the government has less influence. It would need more administration to collect the tax, and the effort might not be worth it overall.

In sum, the government struggles to accurately define babysitting. The boundaries between a full-time childcare position, an afternoon spent watching your cousin, and a summer filled with hours at the pool with your neighbour’s son are ambiguous at best.

To add to the confusion, the legality of tax-free babysitting is, in actuality, almost a defunct debate. Because babysitting is often a part-time, low paying job, annual salaries rarely reach the £11,000 threshold at which workers must pay taxes. Avoiding taxes on babysitting is, therefore, usually legal (unless you’re supremely talented at childcare and manage to earn £11,001).

For all of you who aren’t planning on starting an underground nannying business that includes dozens of kids and operates between the hours of 2:01 am and 5:59 pm, accept that £20 from little Johnny’s mum with the utmost confidence.


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