foster carer and tax credits.
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gorryworry
Posts: 9 Forumite
Hi, I am in a huge mess I think. I am a foster carer and was advised by a tax credit advisor to declare that my income from fostering was 0. I quieried this due to the fact that I had a profit on my tax return and she agin told me that no income was taken into account and that i couldnt make a profit from fostering, I am now ill because i continued to declare 0 income for 5 yrs and I am worried sick that I have commited tax fraud.
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Thankyou for replying, I had come across tht site and was reading which is why I think a mistake has been made, I'll have a look at the other site also,
thankyou again0 -
We were foster carers (now retired) and always on the advice of tax credits declared nil earnings. This is quite legal, and many of my friends who are foster carers are still declaring nil earnings. Same for income tax, nil earnings declared. Also you NI contributions are paid for under the Home Responsibilities. Stop worrying you've done nothing wrong.0
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Are you sure your return is correct if you arrive at a profit?0
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It's very confusing because my local radio station are running adverts that say ' you can earn up to £450 per week per child as a foster carer'. And they use the word earn0
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thankyou CCL. they have always told me its nil earnings regardless of the amount of chidren i foster. its all so confusing .0
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Hi Darksparkle.
yes im sure ive done it right, i foster 3 children so with my tax allowance of 3 x 200 + 10000 per houshold i arrive at a profit, once i deduct my personal allownce it low for income tax but from what ive just read its the profit i give for tc purposes.0 -
Hi Darksparkle.
yes im sure ive done it right, i foster 3 children so with my tax allowance of 3 x 200 + 10000 per houshold i arrive at a profit, once i deduct my personal allownce it low for income tax but from what ive just read its the profit i give for tc purposes.
:money:0 -
You have tax exemption for the £10000 plus the £200 for each child. So you have no taxable profit.
Tax exemption
There!!!8217;s a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you don!!!8217;t have to pay tax on the first £10,000 income (after expenses) you make from fostering.
Tax relief
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you don!!!8217;t have to pay tax on some of your earnings over £10,000.
Age of child Tax relief
Under 11 £200 per child
Over 11 £250 per child
Example
Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She doesn!!!8217;t have to pay tax on the first £25,000 she earns:
Tax exemption = £10,000
+
Child 1 (52 x £250) = £13,000
+
Child 2 (10 x £200) = £2,000
Total = £25,000
https://www.gov.uk/foster-carers/help-with-the-cost-of-fostering0 -
:beer:You have tax exemption for the £10000 plus the £200 for each child. So you have no taxable profit.
Tax exemption
There!!!8217;s a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you don!!!8217;t have to pay tax on the first £10,000 income (after expenses) you make from fostering.
Tax relief
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you don!!!8217;t have to pay tax on some of your earnings over £10,000.
Age of child Tax relief
Under 11 £200 per child
Over 11 £250 per child
Example
Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She doesn!!!8217;t have to pay tax on the first £25,000 she earns:
Tax exemption = £10,000
+
Child 1 (52 x £250) = £13,000
+
Child 2 (10 x £200) = £2,000
Total = £25,000
https://www.gov.uk/foster-carers/help-with-the-cost-of-fostering
OP has said she still has a profit after the allowances though.0
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