Buying a home in a conservation area: What you need to know before you proceed
Employing someone to work in your home feels different from running a business with staff. However, in legal terms, it is not.
Whether you take on a nanny to look after your children, a housekeeper to manage the household or a personal assistant to support your daily life, you are almost certainly taking on the full range of obligations that come with being an employer under UK law.
Many households do not appreciate these responsibilities until something goes wrong.
The obligations that apply from day one
As soon as you engage a nanny, housekeeper or personal assistant directly, rather than through an agency that remains the employer, you become responsible for a set of legal duties that mirror those of any other employer.
These include:
- Registering with HMRC as an employer and operating PAYE to deduct income tax and National Insurance contributions from wages paid
- Providing the employee with a written contract of employment, which must set out duties, hours, salary, holiday entitlement, notice periods and other key terms
- Paying at least the National Living Wage, regardless of whether the arrangement is described informally or payment is made in cash
- Providing itemised payslips at or before the point of each payment
- Auto-enrolling eligible employees into a qualifying pension scheme, with a minimum employer contribution of three per cent
- Paying statutory sick pay and, where relevant, statutory maternity, paternity or parental leave pay
- Taking out employer’s liability insurance, which is a legal requirement
- Carrying out right-to-work checks before employment begins
Common mistakes that create serious risk
The most frequent errors made by household employers tend to follow the same pattern.
Paying a nanny or housekeeper in cash without running a PAYE scheme does not remove the legal obligation to do so.
A worker who is described as self-employed but who works exclusively for one household, takes instructions from the family and has no control over their working arrangements is likely to be an employee in law regardless of the label applied.
HMRC and employment tribunals look at the substance of the relationship, not the paperwork.
Nannies, in particular, cannot legally be self-employed under UK law.
Treating them as such exposes the household to unpaid tax and National Insurance, together with the risk of employment claims if the relationship ends badly.
Changes coming from 2026 and 2027
The Employment Rights Act 2025, which received Royal Assent in December 2025, is being introduced in phases.
From April 2026, changes include wider access to Statutory Sick Pay with no earnings threshold and no waiting period and day-one entitlement to paternity and unpaid parental leave.
From January 2027, the qualifying period for ordinary unfair dismissal protection is expected to reduce from two years to six months.
For households that manage domestic staff informally or allow temporary arrangements to drift into longer-term employment, the January 2027 change in particular deserves attention.
What begins as a short-term arrangement can quickly become a more established employment relationship and the protections available to the employee will increase accordingly.
If you employ or are considering employing staff at home and want to make sure the arrangements are on a sound legal footing, our team can advise you on the steps to take. Please get in touch to discuss your situation.
Related posts
