HMRC treats most nannies working in a single family's home, on set hours, using the family's equipment and following their instructions, as employed by that family, not self-employed — even if both sides would prefer a self-employed arrangement for simplicity. This matters enormously for MTD, because employed income is handled through the family's PAYE payroll (they become your employer and must register as one), and MTD for Income Tax doesn't apply to it at all.
Genuinely self-employed nanny work typically looks like: working for several different families on a flexible, ad-hoc basis, setting your own rates, providing your own equipment, and having real freedom over how and when you work. If you're unsure which category you fall into, this is worth getting right, since misclassifying employment status has consequences beyond just MTD.
Nannies who genuinely work self-employed, often through nanny-share arrangements across two or three families, or via a nanny agency that places them on a self-employed basis, do have MTD-qualifying income from that work. Every family's payments combine into one qualifying income figure, regardless of how the hours are split between households.
If you're employed by a family instead, these expenses generally aren't claimable in the same way. your employer handles tax through PAYE and different rules apply.
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It depends on the real working arrangement, not what either side calls it. Working set hours for one family, using their equipment and following their instructions, generally means you're employed by that family. Working flexibly across several families, setting your own rates, is more likely genuinely self-employed.
No, if a family employs you through PAYE, that income is handled through their payroll and MTD for Income Tax doesn't apply to it, regardless of how much you earn.
If you're genuinely self-employed in that arrangement, yes, both families' payments combine into one qualifying income figure. If either family actually employs you, that portion is excluded.
Not really. HMRC looks at the actual working relationship, not a preference either side has. Getting this wrong can create problems for both the nanny and the family down the line.
Au pair arrangements typically involve board and lodging alongside a modest allowance and are usually treated differently to standard nanny employment. If you're unsure how your specific arrangement is classified, it's worth checking directly rather than assuming.