For grandparents Providing childcare What should we do about money? Looking after grandchildren incurs costs. There are lots of things to pay for: food, toys, days out, transport fares etc. It is good to have an open discussion about who is expected to pay for what. Do not be afraid to say no to your grandchildren or the parents if an activity is too costly. You should not feel obliged to pay for anything. Remember that the parents are saving a lot of money thanks to you! One idea is to make a budget keeping track of your outgoings, which you can show to the parents. One common arrangement is for parents to cover the grandparents’ expenses (lunch, outings etc). A minority of parents do pay grandparents for providing childcare, but many grandparents are quite happy to look after their grandchildren for nothing. When that is the case, parents may choose to treat the grandparents to a meal out or small gifts as a way to say thank you. If the parents pay you for providing childcare, then they become your employer. An employer-employee relationship entails certain rights and responsibilities including potential tax liability (depending on your total income). For general advice on the legal aspects of employment you can contact ACAS. For advice on the tax implications, contact the Money Advice Service or TaxAid.