Tax and Carers Allowance

Shortie

Hello, I wondered if anyone could please help/advise

In July 2017 I left work and claimed carers (sent off my p45 etc) which was awarded and I have been getting. All okay there

So, I am looking at doing some work during school hours (most likely casual/temp) and know that I can earn up to 120 (after tax) before I 'lose' carers allowance

But I spotted something about carers being taxed if your earnings take you over the threshold which threw me. Does anyone know how this works as I can't spot anything on the gov site about taxing on carers - just that if you are paid over 120 a week you can't claim carers?

If carers is taxable, does it take into account earnings from before you started to claim? If so, the job I had before puts me squarely in a tax bracket so I'll need to find out how to pay the tax on the carers I've had so far -i.e. is it self assessment or should I have let the tax man know already?

Sorry, I'm a natural worrier and am now paranoid I've done something wrong with the carers :-(

Brighty

Yes Carers allowance is taxable, it states so on the gov carers allwance page
https://www.gov.uk/carers-allowance

"You have to pay tax on it if your income is over the Personal Allowance."

So if your total earnings for the tax year +carers allowance takes you over your personal allowance of £11.5k (or £12.65k if you get marriage allowance transfer), then you'll have to pay tax on it.

Just work out how much carers you'll get this tax year and add it to your P45 earnings. Is that over £11.5k? If so you'll owe 20% of whatever is over, but you've probably already paid enough in the tax on your previous job. Your p45 will show you how much you've paid.

What i don't know is how you go about sorting out any difference, as my wifes is all sorted out through self assesment which we have to do anyway because of rental income. Probably no point registering for SA just for the carers, as it will only be an issue this year, going forward the max you'll get in any tax year will be 52x£116 earnings and 52x£62.70 carers, so you'll never go over the personal allowance limit.

FYI, weekly earning limit for CA is £116 not £120

Shortie

Ah, thanks Brighty. I completely missed the taxable bit. I'll find a number for the carers people in that case and ask them how I pay the tax I owe (ie do I need to pay it as I go along or do I do an online SA form in the new tax year for it)

So, I've always been in full time employment with companies for yeas atva time so tax is something that has merriely happened for me (apart from 2 years of SA tax forms for rental income) and assumed that the tax I had paid for my banding co ered what I had earned to that point - sorry if I'm being a pain (and daft) but you mentioned that my tax may have covered what I owe but I assumed the tax you paid co ered that month's earnibgs based on the forecasted tax band (ie if you would be in the 25% or 40% band if you did that job for the year) - and my last job slide me over the tax band for the year by the time I had left.

Thanks fo the correction on the weekly amount too

Thanks again for the help :-)

Brighty

Carers allowance don't care about tax, it's HMRC that will need telling
https://www.gov.uk/income-tax/find-out-if-you-need-to-pay-income-tax

The tax you paid each month when you were working was based on the assumption you'd be working and earning the same every month for the whole tax year, that's how PAYE works, so as you only worked for 3or4 months this tax year, you will have over paid tax on those earnings.
As i said, to work out what you owe(or are owed) Add up total earnings from your P45 + carers allowance (8 or 9 months of £62.70), once you have that total, deduct your £11500 personal allowance, then multiply that by 20%, that's the tax you owe this year, look on your p45, have you already paid that much? If not, you owe them, if over, you're due a refund

Dazed_and_confused

Don't forget any calculation you do now will be wrong if you do actually take up the further employment referred to in your original post.

Shortie

Thank again both, and good points that it's HMRC and that the taxable pay is only to that point in time. I'll check eith HMRC tomorrow if I need to pay as a lump sum via A self assessment or if they need me tk back pay the tax now and hen pay it with each carees payment. I suspect it'll be the self assessment route which is fine with me :-)