Carers Allowance for the Self-Employed

Machine_Silver

I would like to start a new thread for discussion about those of us who are self-employed or considering becoming self-employed whilst also being carers.


I'd like to open the thread by sharing my own experience of this but would be really pleased to hear from anyone else who can add advice and information or to correct me if I have said anything that is inaccurate.


So, the first thing is that as a self-employed person (in may case and Engineering and IT Consultant), when you first apply for carers allowance you find that you can only claim after you have completed your end of year accounts. If for example you complete accounts and earnings data for 2017/18 and they fall below the threshold for that financial year, that then entitles you to carers allowance to be payed for the following 2018/19 financial year. You can only backdate CA for a max of 3 months so as I found out to my cost, it really important to get your claim in well within that time if you want it backdated to April 6th. It also means that in this example, even if your were caring for the whole of 2017/18 you cannot ever get the backdated CA for it, i.e. as compared to and employed person on PAYE, you are always working a year in arrears.


The second thing to watch out for is that at the start of the next tax year, you will receive a letter at very short notice that your CA for the coming year will be suspended until you provide evidence of earnings for the previous financial year. If you need the involvement of accountants or need to collect and collate documents, then you need to get things organised well in advance or you might fall foul of the 3 month backdate deadline again.


The final thing is that you cannot just submit your business accounts or P&L sheets to the Carers Allowance Unit because some of the allowances that HMRC allow you are not eligible for Carers Allowance assessment purposes. Direct out of pocket costs such as travel, motors, business insurance and cost of sales should be OK though and were allowed in my case.


In short, Carers Allowance is a bit of a nightmare for the self-employed and the irony of this is that many carers actually become self-employed in order to get the flexibility they need to fulfil their caring role.


IMHO Carers Allowance is a benefit which is really quite illogical, unfair and it needs a major overhaul especially for the self-employed. It is not really means based at all in that it is only "Earned Income" that counts in the assessment. So, savings income doesn't count, nor does private pension income so you could have huge amounts of non-earnings income coming in but still qualify whilst others with excruciating low income and few savings to lean on can be really up against it.


Any feedback, advice and personal experiences of this would be very much appreciated.

huckster

So when did you first become self employed and when did you first register the Carers Allowance claim ?

Seems logical for a benefit such as CA to understand the true level of self employed earnings. So there might be a need to have at least a full years self employment earnings details.