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Support for Foster Carers

26/09/2017 10:45:10
HMRC generally treat foster carers as Self-Employed for tax purposes and so you will need to Register for and file your Self-Assessment tax return.

We know that foster caring is not the same as people who sell goods and services to others, and for this reason there's a special scheme for foster carers called "qualifying care relief". You can find more about this in help sheet HS236.

If you are new to foster caring you may find our online guide helpful. It includes details on how to register, qualifying care relief, record keeping , national insurance, completing your self-assessment tax return and more.

If you have a technical query you can find more information in the Business Income Manual.

You can also ask us your questions below; our Advisers are here to help you. Please remember don't include any personal details such as your National Insurance number.

This message was edited 8 times. Last update was at 05/06/2019 13:04:48

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Support for Foster Carers

30/04/2018 15:41:24
Hello
I have a solo special needs placement the LAC. Is in receipt of DLA
I receive a weekly enhanced double fee of £783 from my IFA. For his complex needs as a sigle Foster Carer.
I have no other income no other dependants
My annual remittance statement for 2017 to April 2018 showed a final taxable income of £19000.00
My previous tax year statement with a different non enhanced placement/s showed a final taxable income of £13000.00 for which i paid Nil tax.
My question is will i be liable to pay tax on the £19 K this year? As a large amount of the remitance i received has been spent on the disabled foster chils needs for which i have all receipts.
I do not know how i would evidence these as i do not want to send then and then not be in receipt of those as further evidence.
I have been a Foster carer for 6yrs and never had to pay tax or NI or an accountant
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Re:Support for Foster Carers

03/05/2018 10:41:22
Hi

Thank you for your enquiry. As a foster carer you will be entitled to claim Qualifying Care Relief against your income from Foster caring. This is a basic yearly amount of £10,000 plus either £200 per week of placement (for children under 11) or £250 per week of placement (for children over 11 and adult). If your calculated relief amount is more than the £19,000 you received for 2017/18, then your liability again will be nil. If your calculated relief is less than the £19,000 you can choose to either claim the relief and then the difference may be subject to tax and National Insurance or you can claim your actual expenses against your £19,000.

I have given you a link to our helpsheet on Qualifying Care Relief to allow you to see the full details of this scheme.

https://www.gov.uk/government/publications/qualifying-care-relief-foster-carers-adult-placement-carers-kinship-carers-and-staying-put-carers-hs236-self-assessment-helpsheet/hs236-qualifying-care-relief-foster-carers-adult-placement-carers-kinship-carers-and-staying-put-carers-2018
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Support for Foster Carers

26/06/2018 09:09:50
Posted by Di Lloyd 22/02/2018 08:52:42

Dear HMRC

My husband and I are foster carers for our niece. My husband is self-employed and has declared the payment in this years tax return. Is there anything else we need to do?. I am employed at a university so not self-employed. Thanks
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Support for Foster Carers

26/06/2018 09:11:30
Hi

There is nothing else that you need to do.

I attach a link to the relevant help sheet in relation to foster carers:

Qualifying care relief

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Support for Foster Carers

03/07/2018 09:41:08
Dear HMRC

Do you know if the Trading Income Allowance applies to foster carers?

Many thanks
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Support for Foster Carers

03/07/2018 13:37:56
Hi

A foster carer can claim either:

1. the simplified method i.e. they pay tax on the difference between the money they get paid by the local authority and their qualifying amount (£10, 000 per household per year plus £250 per week for a child aged 11 and over, £200 per week for a child aged under 11

OR

2. the profit method i.e. they pay tax on the difference between the money they get paid by the local authority and their actual expenditure OR alternatively claim the trading allowance.

Thanks

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Support for Foster Carers

01/08/2018 14:39:51
Hello
I am a kinship foster carer and look after my niece. I started looking after my niece in January 2018 as a fostering arrangement and received a fostering allowance for her. However, I didn't become fully approved as a kinship foster carer until April 2018.

When I register as self-employed, what date do I state my self-employment started? January or April 2018?

If I have to put April, how do I account for the fostering money I have received from January to April?

Thank you so much and look forward to hearing from you.
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Re:Support for Foster Carers

02/08/2018 08:03:12
Good morning

The income you receive from the local authority for fostering duties is a taxable income, so you will declare you became self- employed from the point you started fostering in January 2018. You will account for the income between January 2018 and 5 April 2018 on your 2017/18 tax return.

Here is a link to guidance for foster carers on our website.

Foster carers

I hope this helps

This message was edited 1 time. Last update was at 09/08/2018 07:13:23

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Support for Foster Carers

30/08/2018 06:31:40
Hi
My accountant which I use for my fostering and tax says that foster carers are subject to IR35, 2017 which is "Off payroll contractors working for the public sector". Says this will apply to private sector as well in 2018.
Could HMRC confirm that foster carers approved either by independent fostering providers (private) or local authority fostering services are NOT subject to IR35 2017/18?
Thank you
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Re:Support for Foster Carers

30/08/2018 09:16:21
Hi,

Thanks for your question.

The IR35 refers to individuals who have their own Limited Company or those who work for a service agency.

When you register as a foster carer, you must register as self-employed. Income from foster care is entered on the self- employment section of the tax return. We are not aware of any imminent changes to this.

Please also see the link to our online guide for foster carers in the original post on this thread, which you may find useful.

Hope this helps and thanks for using the Online Customer Forum.
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Support for Foster Carers

07/09/2018 08:27:21
Good Afternoon
I am a foster carer and just trying to get to grips with the whole tax thing!

I have read the information on HMRC's e-learning package for foster carers which is really good. There is a section about foster carers looking after a child with a disability/additional needs and it clarifies that specialist carers in receipt of enhanced payments are eligible to include expenditure on specialist items in the calculation of their tax threshold for QCR - i.e. increase their tax threshold (with receipts as evidence).

It does seem to refer to specific individual items, however, I wondered if this could include additional expenses in the case of myself who does significant additional school mileage in order to get a foster child to an appropriate school in relation to the child’s specific needs. I exceed my tax threshold due to this extensive mileage (100 miles per day) because the child/ren cannot avail of public transport due to their specific needs.
Would you know if I am allowed to increased my tax threshold because of this additional mileage because the child has a disability?

Thanks
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Re:Support for Foster Carers

07/09/2018 12:44:14
Hi,

Thanks for your question.

Guidance relating to your query can be found in our Business Income Manual at this page BIM52765

It advises that there may be some exceptional expenses rather than specialist equipment. In this scenario the carer should record their actual expenses for a set period and use the results as a base for calculating the regularly recurring expenses for the full year, which can then be added to the qualifying amount.

I hope this helps.
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Re:Support for Foster Carers

07/09/2018 15:24:07
Hi,

Thanks also for your feedback also on the Online Guide for Foster Carers. We'll pass this on to the team who wrote it, I'm sure they will be glad you found it useful.

Thanks again.
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Support for Foster Carers

10/09/2018 13:31:02
Hi HMRC

I have read a post above about the trading income allowance but I'm still really confused.

Lots of foster carers are telling me, if my payments from fostering are below £1,000 I don't have to register as self-employed and I don't have to complete a tax return form.

I thought ALL foster carers have to register as self-employed? do we have a choice about registering as self-employed if our payments are below £1,000 for the year?

I'm a respite foster carer and only get about £500 a year in fostering payments.

Any help really appreciated because I am so confused.

Thanks

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