Foster Carer Tax Services
Specialists in Foster Carer Tax Services
We know that your role as carer is extremely demanding and rewarding and we can help you by taking care of all your paperwork and compliance obligations.
Foster Carers receive favourable tax treatment from HM Revenue and Customs Foster Carer Tax Services
I am a retired Foster Carer and a working Accountant and alongside my wife we worked in the Childcare sector for many years. We bring our experience in helping you to navigate the complexities of this specialised area in accounts and Tax Return preparation.
Please read on for additional Foster Carer information and if you require our services then we would be delighted to assist you.
Foster Carer Allowances
The allowance covers two parts, a maintenance allowance which covers the cost of looking after a young person and the reward element in recognition of the foster carer’s skills. The income that you receive covers the cost of living for both you as the carer and the child or young person you look after. The fostering payments will cover the following types of expenditure:-
Food, Clothing, Household bills, Travelling Expenses, Other such as a payment for birthdays, Christmas, school dinners and religious festivals.
If your total receipts from qualifying care in the tax year do not exceed your qualifying amount, those receipts will be free from income tax for that year. Your total receipts from foster care are all the payments you receive from your local authority, health service body and independent fostering agencies.
This consists of two parts which you should add together.
- An annual fixed amount of £10,000 for each household
- If you are a Foster Carer for less than a year then this amount should be apportioned for the year.
- A weekly amount for each person placed with a Foster Carer.
You have two options for calculating the Foster Care tax you have to pay
- The profit method – this is where you pay tax on the actual caring receipts minus your actual expenses and capital allowances.
- The simplified method – where you pay tax on your actual receipts minus your qualifying amount. If you use this method then you don’t have to consider your expenses and capital allowances.
You must consider the best method to use as your taxable profit will be less with one of the options available. You must inform HMRC if you want to use the simplified method.
Let me work through the complexities for you, decide which is the best method and undertake the Accounting and Tax Return obligations for you.
As a self employed Foster Carer in receipt of a fostering allowance you will be unable to claim Child Tax Credit or Child Benefit however you may be able to claim Working Tax Credit and other benefits such as income support and council tax benefits depending on your individual circumstances.
We charge a fixed fee of £150 per Tax Return (+vat)* so you know exactly what it will cost with no nasty surprises.
*Most carers are sole traders even if their other half helps out with the Fostering so only one Tax Return is needed but if you Foster as a Partnership there will be three Tax Returns, yourself, partner and the Partnership for a fixed fee of £150 (+vat) for each return.