Carer's Allowance & Registering as Self-Employed

jpab123

Hello,

First of all, sorry if I'm posting this in the wrong section.

Basically, a short time after uni and starting my first job, I had to quit to become a full-time carer for a sick relative. I've been receiving Carer's Allowance for a number of months since. I have looked at ways to try and boost my income from home and have just been offered an at-home job with Take Note. They require that I register as Self-Employed.

I'm a complete newbie to this self-employed stuff.

1) Am I right in thinking that registering as being self-employed will not affect the Carer's Allowance (assuming I earn under the £120 threshold each week)?

2) Am I right in thinking that if I earn 185 a week (120 from the job/65 from CA), I won't have to pay tax, but would still need to complete a tax return?

3) On tax returns, would you list Carer's Allowance as part of your income?

4) Any tips for the actual application on gov.uk would be appreciated too. I had a quick look and there are so many options which I found a little daunting.

I may go to Citizen's Advice if this is the sort of thing they help with.

But thanks in advance for any advice on here!

Hope I don't sound like too much of a dunce!

[Deleted User]

You would be best talking to your local HMRC office for advice on tax, but you are correct in that you can earn around £120 and still get CA, and you can be allowed some deductions from that £120 as well.

calcotti

1) The Carer's Allowance threshold is £123/week. Your entitlement to CA each week is based on your earnings in the previous week. You do need to be careful that you do not go over the threshold. There is information on how earnings are calculated here https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/843575/dmgch15.pdf. See paragraphs 15490 onwards for self employed earnings.

2) If earnings of £120/week plus CA of £66.15/week were earned over 52 weeks then your total income would be £9,679.80 which is below the tax free allowance of £12,500 so no tax would be payable. You would also be below the threshold where you are required to pay Class 2 contributions https://www.gov.uk/self-employed-national-insurance-rates so would not have to pay these. You would be getting Class 1 NI credits towards your State Pension through the Carers Allowance claim.

3) Carer's Allowance does have to be declared to HMRC on a tax return because it is taxable income, see https://www.gov.uk/income-tax/taxfree-and-taxable-state-benefits. There is a section on the tax return that asks about benefits

whizzywoo

Before I retired in May this year, I was self-employed and receiving Carer's Allowance.

1) Carer's Allowance is taxable income and must be entered on your Self Assessment Tax Return.

2) Approximately every 12 months the dept which deals with Carer's Allowance sent me a form to complete which was basically an Income & Expenditure Report concerning my self employment. This is not necessarily for the same dates covered by the tax return. However if you do have a profit and loss account for the tax year they were normally happy to accept this with a few adjustments.

However my income from self-employment was well below the weekly threshold. What is an allowable expense for tax purposes is not necessarily the same as expenses allowed when calculating income for the Carer's Allowance threshold. So you will need to be very careful not to exceed the threshold.

You will need to study the link provided by Calcotti above, paying special attention to the sections on Self Employed earnings.