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Meanwhile, the payroll service Nannytax has decided to offer its own personal service company arrangement to nannies after 9 April if, it says, such schemes are not closed in the Budget - expecting that a wide take-up of the schemes will prompt the Government to abolish them as it loses more tax. Nannytax managing director Stephen Vahrman says, 'We are offering a "warts and all" PSC scheme which clearly spells out all the downsides for nannies without fudging the issues, and we will not operate schemes unless parents and nannies both sign up for them together. Our scheme is also designed, where possible, to protect those rights and potential losses of benefits that a nanny might lose by ceasing to be an employee.' Stephen adds, 'We are getting lots of flak from both nannies and parents at present, from some nannies for offering PSCs and from some parents for spelling out all the disadvantages to nannies. But in between there are many parents and nannies agreeing to co-operate to make them work, and many others who have decided to continue with their existing employer/employee relationship.' Nannytax has prepared a list of frequently asked questions about PSCs for nannies, an analysis of all the issues for parents, and another briefing sheet explaining its position to nanny agencies. It encourages parents using PSCs to compensate their nanny in some additional way, such as paying a bonus or contributing to a stakeholder pension.

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