Parents hit by NI cost for nannies

Parents employing nannies have been dealt a "triple whammy" by the Budget, it was claimed today.

Tax experts warn that the cost of employing a nanny will rise by more than £500 a year, or £10 a week, after the Chancellor's decision to raise National Insurance by a penny.

His failure to extend the childcare tax to cover nannies means employers will not only have to pay their extra own one per cent contribution but will also be required to fund the nannies' contribution too. For many, personal taxation will also have risen.

Peter Cullimore of the Recruitment and Employment Federation said: "Even though the Chancellor said there would be special arrangements for people working irregular hours, if they hire nannies they will have to pay more."

Stephen Vahrman, of Nannytax, told the FT parents paying a nanny the London average of £344 a week would have to pay £10 a week more. A Treasury official said nannies were excluded from childcare tax because they are not regulated.