Paying somebody cash

P

pat2468

Registered User
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18
Hi,
we have just found the perfect person to mind our 3 children in our home. The person has asked to be paid some cash and also in an official capacity so she can claim social during the summer 3 months when my wife is on holidays (she is currently on job seekers). What are the implication for us to pay here officially, do we need to set up company, do we have to pay PRSI and will we need to look at our insurances. We have contributed all our working life's and have lost 50% of the value of our home purchased in '06 so we are not in a position to pay creche fee's and have no problem paying this person cash.

Any advise welcome.
 
I would not recomend you to pay anyone in cash. Paying cash in the situation you outlined would be assisting someone commit fraud on all tax payers, including you. That Ireland is gone....or should be gone!!
 
Any body we have discussed this with is paying in cash. If we go down the aupair route it is all cash. How can i pay somebody "officially", do i need to set up like a company.

Also where possible people are dealing in cash in my experience, small business owners are more than will to take a cash payment. I have noticed a serious increase in this over the last three years. What about the fraud committed by the banks and people who monitored them.
 
Depends whether you mean paying cash as in paying it undeclared and unofficially or simply paying cash as in she doesn't have to bother cashing a cheque or going to an atm. There is nothing wrong with the paying of actual cash notes to anyone for anything, it is the not declaring it as an income or wages that is the problem.

I do some work where I am always paid in actual cash, however every penny of that is accounted for in my returns, people always assume cash means tax evasion, sometimes it is just the handiest way to pay for a service.

Now I know the OP said the person wanted to be able to claim social welfare so it does seem in this case there is some evasion or deception element to it!
 
wbbs said:
Now I know the OP said the person wanted to be able to claim social welfare so it does seem in this case there is some evasion or deception element to it!
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My reading was that the childminder wished to keep her option of claiming dole open during the summer months during which the OP would not have work for her - as this would require sufficient stamps, this would suggest that they are not looking to deceive.

Anyway, to the OP, no, you don't have to set up a company to register as an employer. You can just do it in your personal name using a form TR1. You'd be well advised to ring your local tax office and ask to speak to someone who deals with registrations, tell them how the employment is arising and then send it that person directly (sometime Revenue can get confused when a person registers as an employer but not as a business).
 
pat2468 said:
Any body we have discussed this with is paying in cash. If we go down the aupair route it is all cash. How can i pay somebody "officially", do i need to set up like a company.

What about the fraud committed by the banks and people who monitored them.
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Anyone that takes an au pair on those terms is assisting someone defraud the state.

What pays for schools, hospitals etc? And social welfare? Taxes-not bankers.

Pay the full amount officially (not some officially and some cash) and let the Au Pair work out how to fund their Summer holiday. Saving some each week would be an honest pursuit.
 
Luternau said:
Anyone that takes an au pair on those terms is assisting someone defraud the state.

What pays for schools, hospitals etc? And social welfare? Taxes-not bankers.

Pay the full amount officially (not some officially and some cash) and let the Au Pair work out how to fund their Summer holiday. Saving some each week would be an honest pursuit.
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That's not actually true.
Do I need to pay Tax/PRSI
No, an Au Pair receives pocket money and is not subject to tax or PRSI

From here http://www.aupairireland.ie/faq.html?section=Employers#6

However the OP isn't hiring an Au Pair, they're hiring a child-minder and the child-minder is seeking to defraud the system with the help of the OP.
 
dereko1969 said:
they're hiring a child-minder and the child-minder is seeking to defraud the system with the help of the OP.
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Most childminders take cash as handiest, however most will keep a record of it by writing it down or lodging it to their account as proof of their income. There is of course some under or un-declaring of cash, as in any business.

Personally I run a mile from this childminder after the position she has put you in by asking you into engage in illegal/immoral activity.

Post on schooldays.ie under childminding forum or read other posts there for more info.
 
dereko1969 said:
That's not actually true.
Do I need to pay Tax/PRSI

However the OP isn't hiring an Au Pair, they're hiring a child-minder and the child-minder is seeking to defraud the system with the help of the OP.
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To clarify, I meant child minder but the OP sued the word Au Pair in a subsequent post. So its ok to pay an Au Pair cash. Thats not what is going on here.

However, paying cash to a childminder so they can swindle the SW is not permitted. Something you seem to agree is wrong.
 
Another angle,
I agree to pay the childminder a sum per week (€270). That payment can be made by cheque or cash, it is the responsibility of the childminder to pay their tax's.

With regards to other opinions about "Black Market", at least if you are paying somebody the money is circulating within the economy. If people cannot afford to pay for childcare in a creche, should they give up their job and rely on what benefits available to raise their children or look to other options which in the long run are of more benefit to the economy.
 
You seem to think its ok to evade or shirk taxes?

Thankfully, you have to register this employment (yes you get to become an employer) and you cant just pay cash and think its not your concern after that.

See Revenue.ie
 
If she is coming to your home to mind your children she is your employee and you are responsible for tax not her.

A childminder who minds children in the minders home can be self employed and there is an amount which can be earned tax free. People paying cash in that situation are nit doing anything wrong.
 
ClaireM said:
A childminder who minds children in the minders home can be self employed and there is an amount which can be earned tax free. People paying cash in that situation are nit doing anything wrong.
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the tax free limit is currently anything under €15,000. As I said this self employed childminder receiving cash will simply write it down or lodge it to account for proof of income (the bank statements then effectively become the payslips should they be needed for loan, proof of income etc).
 
Wrong as far as I know. If working in the home of the children, the person is an employee. Revenue are clear on this.
If minding the kids in the child minders house, then a self employment status arrises.

If the op was actually interested in doing this legit, they could use google to find out about it. Instead they come here looking for advice on getting around the system. That is not the purpose of AAM.
 
pat2468 said:
..That payment can be made by cheque or cash, it is the responsibility of the childminder to pay their tax's.
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No. As others have pointed out, if she is minding your children in your home and you are her only employment, she is your employee and you have to keep books on her and pay whatever tax/PRSI/employers PRSI is due. If she minded a different child every day of the week, she might have a case for saying she was self-employed but Revenue are quite clear about the distinction between employed and self-employed and a childminder in your home five days a week would not be considered self-employed.

You don't have to set up a company - just register as an employer with Revenue. We employed a nanny in our home for a few years and it was quite straightforward - they will send you everything you need - forms, templates etc.

Paying cash/avoiding employers PRSI etc. could leave you open to backtaxes and penalties if/when you/she are found out.

pat2468 said:
We have contributed all our working life's and have lost 50% of the value of our home purchased in '06 so we are not in a position to pay creche fee's
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How does a fall in the value of your house affect your current cashflow? The mortgage is what it is and what it would always have been even if your house was now worth double what you bought it for. Negative equity only affects cashflow if/when it comes to selling.
 
Childminder relationships with their mindee parents break down very frequently, just go over to rollercoaster or mumsnet and see the multiple threads.

A childminder wise to 'the system' like your applicant could quite easily get you in big trouble should this happen. I think you would be crazy to agree.
 
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