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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Hello, I am an adult carer who cares fora young woman with

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Hello, I am an adult carer who cares fora young woman with a learning disability who lives with me in my own home. I know that when I began this role, I used to complete tax forms but was not eligible to pay tax. However, we have recently had an increase in the amount we receive and I wonder if I now should be paying tax. I am retired and receive a teachers pension but I do not yet get a state pension.

Can you tell mw what you were receiving, when the increase occurred and what you are receiving now please.
Customer: replied 3 years ago.

I was receiving £202 per week which took me just over £10,000 but I think there were components in there which were not taxable. Social Services increased the income considerably just three weeks ago to £463 per week.

Customer: replied 3 years ago.

Hello, are you still there? Do you need any more information?


That appears to be a big increase. Have the circumstances of your arrangement changed at all? Has any explanation been provided by the Social Services?
Customer: replied 3 years ago.

No, they have not increased the rate for many years I understand, and have been trying to do so for some time. There is no change in the circumstances of the arrangement.


Leave this with me while I draft my answer. It will take a short while so please bear with me.

Hi again.

As far as I'm aware, the tax free payments system for adult placement carers which mirrors the child fostering system have not changed and you can see them in HS236 here on page 2, here and here.

The annual maximum tax free amount for one adult placement for a full year is £23,000 (£10,000 + (£250 x 52)). The excess will be taxable unless you wish to compute your income the regular way and claim expenses. I doubt that will be to your advantage as you are in receipt of a pension which will use some or all your personal allowance unless your deductible expenses exceed the payments you receive. There are some examples in HS236.

You will need to contact the tax office on the number here if you wish to reactivate your self-assessment account to pay tax on the excess over the £23,000 but assuming the big increase started in the current tax year, you can wait until after 5 April 2015 to see if you will exceed £23,000 for the tax year. An alternative would be to have the tax collected through the tax code operated against your pension.

I hope this helps but let me know if you have any further questions.

Customer: replied 3 years ago.

hi, does mean i can earn £23,000 as an adult carer on top of my techer/s pension and still only pay tax on my pension. The total earning per year now that we have the pay increase will be £23,150 so does that mean I would only pay tax on the £150 plus tax on my pension?

That's correct.
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