When can a nanny be self employed - when they work for a temp agency?

I saw an advert on Mumsnet for a company called My Travelling Nanny which supplies temp nannies to families going on holiday.  This interested me as I wondered who would be the employer of the nanny in that situation... would it be the parents like it is when they hire a nanny directly, or would it be the agency, or perhaps would the nanny be a self employed contractor.   Hmm...

Looking at the website I found their terms and conditions (pdf) and took a closer look. In their terms they say:

The Nanny shall be an independent contractor, and the relationship of the Client and the Nanny shall in no event be construed to be that of principal and agent or employer and employee or master and servant, unless otherwise agreed in writing.

It also goes on to say about how payment is made... the parents pay the agency and the agency then pays the nanny a fee.

I thought about this and then looked at HMRC: CWG2 (pdf) the guide for Employers about PAYE and NICs.  On page 72 of that guide it says:

The agency is responsible for the payment of NICs where:•    the worker is expected to carry out work personally, and•    someone has the right, even if not exercised, to supervise, direct or control the way the work isdone and any of the following apply:–  the worker is paid by or through the agency–  the worker is paid based on accounts sent by the agency to the client–  the worker is paid by arrangements made with the agency–  there are payments other than worker’s pay (for example, fees or commission between the agency and the client).

So given the situation at hand, the parents are paying the agency and the agency are paying the nanny.  The nanny is expected to carry out the work personally, and someone (the parents most likely) have the right to supervise, direct or control the way the work is done, plus the nanny is paid by the agency, plus the worker is paid by arrangement made with the agency (as the agency seem to be deciding how much is paid).

So does that therefore mean that the nanny is not self employed but is instead an employee of the agency?

I contacted the agency to ask them.  Michaela replied promptly and seemed to be interested in my line of thought, that the nanny may be an employee of the agency, not self employed.   So we are not trying to find out what the situation actually is with regard to nannies being placed in a temp job by an agency, whereby the parents are paying the agency, rather than directly paying the nanny.

Keep following my blog for more on this subject as and when I am able to find out anything useful.

Currently I am now trying to read The Employment Status Manual published by HMRC, which is intended to provide guidance on issues relating to the employment status of individuals.  The area of particular interest is ESM2000 which deals with Agencies.