Charging my elderly father for care

I'm living with and caring for my elderly father. I have a limited company that I use for computer contracting. Is there any problem with my company charging my father an appropriate rate for care (on average a couple of hours a day I'd say) through my limited company?
«1

Comments

  • [Deleted User]
    [Deleted User] Posts: 0 Forumite
    First Anniversary First Post Name Dropper
    edited 4 August 2023 at 2:23PM
    Two questions
    Do you mean you WILL actually be charging your father?
    Or
    Do you mean you want to put the amount he 'could' be paying to you down as an income for your limited company ( for some reason) ? (EDIT I hadn't noted that this is under "cutting tax" so possibly this latter case).
  • Easyjet77
    Easyjet77 Posts: 76 Forumite
    First Anniversary Name Dropper First Post
    Sandy80 said:
    I'm living with and caring for my elderly father. I have a limited company that I use for computer contracting. Is there any problem with my company charging my father an appropriate rate for care (on average a couple of hours a day I'd say) through my limited company?
    I really hope I am misinterpreting  this post!
  • The care will be gratefully given regardless of payment, as it has for several years. The point of charging is that it enables some of his money to avoid inheritance tax which would otherwise be taxed at 40% if inherited and I posted to ask if there is any legal problem with doing this.
  • Sandy80
    Sandy80 Posts: 4 Newbie
    Name Dropper First Post
    edited 21 November 2023 at 10:40PM
    @[Deleted User] the money would actually be paid, thus less IHT would ultimately be paid on his estate. PAYE / NI would be paid on the money 'charged'.

  • Ayr_Rage
    Ayr_Rage Posts: 1,014 Forumite
    First Post First Anniversary Photogenic Name Dropper
    edited 4 August 2023 at 3:20PM
    Do tell how you would invoice personal care through a computer contracting company !
  • [Deleted User]
    [Deleted User] Posts: 0 Forumite
    First Anniversary First Post Name Dropper
    edited 4 August 2023 at 3:40PM
    I assumed it was something like that,  why would you need to put it through your business ?( I have no experience of this in terms of legality  just curious on a general level as an elderly parent myself). if he pays you  for care ( as he would pay anyone else) then it is a legitimate way of reducing his capital and thus any inheritance tax anyway and you'd declare it on your tax return as income. Cleverer minds than mine will hopefully clarify.  

    Im case there's something relevant here https://moneytothemasses.com/tax/inheritance-tax/the-10-best-ways-to-avoid-inheritance-tax
  • DE_612183
    DE_612183 Posts: 1,818 Forumite
    First Anniversary First Post Name Dropper
    Ayr_Rage said:
    Do tell how you would invoice personal care through a computer contracting company !
    There are lots of companies that have multiple income streams - a lot of IT contractors also run Buy-To-Lets - it's not much different to that.

    As long as you can invoice and prove payments, the tax side should not be a problem - however if you are providing care you may need to be registered with your local authority and be vetted etc.
  • Thanks @DE_612183 and indeed the other posters. It hadn't occurred to me how callous it might sound..I probably won't go ahead .. thanks all !
  • Jeremy535897
    Jeremy535897 Posts: 10,423 Forumite
    First Anniversary First Post Name Dropper
    edited 4 August 2023 at 5:07PM
    This is overthinking. While it would be inappropriate to charge anything for your time, any expenses incurred in respect of your father should be paid for by him, including his share of council tax (unless you get the exemption), electricity, gas etc, food etc.

    If he has taxable income that exceeds expenditure, he could make you regular gifts out of income using the specific exemption. If he doesn't, I doubt he is likely to be in inheritance tax territory anyway.
Meet your Ambassadors

Categories

  • All Categories
  • 343K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.6K Spending & Discounts
  • 235.1K Work, Benefits & Business
  • 607.8K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards