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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 14199
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I’m a carer in Scotland, I have 3 children in placement. I’m

Customer Question

Hi I’m a foster carer in Scotland, I have 3 children in placement.
I’m wondering how much tax I should pay if the year end statement is as follows:
Total 69,283
Allowances for 3 kids included in this total is 26,940
Deductions are 1614 for respite care
Additional winter payment of 500 also included in total figure.I’m drowning in literature and want to check I’m calculating properly many thanks
Submitted: 22 days ago.
Category: Tax
Expert:  Sam replied 21 days ago.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Expert:  Sam replied 21 days ago.

HI

How old are the children please and how may weeks did each child stay with you (all year/ part year or just a few weeks)

Are you the sole foster carer in the household

What are the deductions for ? And allowances ?I ask, as these are not deductions considered for tax purposes (unless you had those payments with held so need to come off the total awarded

Thanks

Sam

Customer: replied 21 days ago.
Hi thanks, ***** ***** are 12 10 9 yrs
They are with me 52 weeks as they are a permanent placement
The allowance is awarded to the child for everything they need clothes shoes clubs activities etc
The deduction is for when the kids go to respite care and are looked after by another carer to give me a rest. 21 days per year
I am the sole carer.
I will attach my year end report it may help? Thanks
Expert:  Sam replied 21 days ago.

HI

The tax exemption allows £10,000 per household and then £200 per week for each child under 11 and £250 per week for each child over 11

So you have two under 11 which allows £200 x 2 x 52 weeks = £20800

One over 11 so £250 x 52 weeks = £13000

So you have an exemption of £10000

Plus £20800

Plus £13000

total £43800

You are paid £43405 as fees but also have the allowances amounting to £26940 so a total position of £69283

AS this is more than the qualifying exemption of £43800 - you have two ways of working this out however the payment notice is in two names - yet you state you are the sold carer - can you clarify this please

If it is just you - as the foster carer then you have two ways of working out the tax if your total payments are more than your qualifying amount

  • the profit method - you pay tax on your total care receipts less any expenses and capital allowances
  • the simplified method - you pay tax on the difference between your qualifying care receipts and qualifying amount

What have you declared this as previously;y (as you have to stay with the same method) as the allowances IF Taken out of the position render you tax free but with create a tax and Class 2 and 4 national Insurance position and as the outgoings to run the home and provide the children with day to day living costs are greater than the fees then you tax and National Bill will be smaller

So its important that we get this right for you and for you to continue the method you have previously used

Thanks

Sam

Customer: replied 20 days ago.
Hi I have always since starting fostering submitted tax return for myself as my husband is employed and pays his deductions weekly for tax etc. The payment is for the household the same if either one or 2 carers.
I think my accountant used the simplified method but I’ve attached my previous return as it will provide more info.
I’m only questioning as in speaking to other carers in Scotland they are telling me I’m paying far too much tax.
I’ve alwas used the same accountant company but last year was given a new worker, I did question why the big increase in charges but he dismissed my questions.
I just want to be sure. Thanks
Expert:  Sam replied 20 days ago.

Hi

I have no idea what method was used - and its just the income declared - and no sign of expenses and no advise or their own computation to show what deductions were made. So can you advise me how much were the payments for 2016/2017?

Thanks

Sam

Customer: replied 20 days ago.
Hi Sam my year end statement is at home, I’m on holidays until 13/4 so can’t access it for further info just now apologies.
Expert:  Sam replied 20 days ago.

Hi

Not a worry - let me know when you are back home and send the details through to me then - I can then establish whether the simplified method was used for 2016/2017, and then provide you with a tax and Class 4 Calculation on 2017/2018

Thanks

Sam