Slef employed

[Catfriend]

hi just wondering if foster carers are self employed?!!!

[plainjayne123]

yes

[Fosterangel]

Phone your local tax office for advice on how to complete a self-assessment tax form for being self-employed as a foster carer - they are very helpful. There are "special exemptions" for foster carers so you do not need to fill out a full tax form and only need to tick a box on the self-assessment tax form each year if fostering is your only income and you have no other income or job. The tax office will advise you how to do this and it really is very easy. If I can do this then anyone can! You do not need an accountant or to spend any money on book keepers etc.

Also, you will need to ask what national insurance to pay as a self-employed foster carer. I pay class 2 and it is about £10 per month (approx).

I always phone the various offices to check each year to see if things have changed as fostering tends to be quite isolated and the SW's never seem to know anything about tax or NI contributions!

[Catfriend]

Hi fosterangel. I've been on the phone to HMRC but they couldn't really help me with the tax credit side of things. Their advice was to ring my local LA as they would know better!!! I've asked my SSW but she doesn't know the money side of things.!!!

[sickofthissnow]

Fostering is a 'qualifying job' - you will be eligible for working tax credit whilst you foster but not child tax credit (for the foster child). Income can normally be stated as £0 (there is a limit but unless you foster loads or are with an agency and on a professional rate, you won't reach it). You won't be able to claim child benefit for the foster child. If a child is eligible for DLA you would be eligible to claim for this on behalf of the child - different LA's have different rules regarding how this is spent/saved.

You are self employed for tax purposes - you will need to register as self employed and complete a shortened version of the self assessment.

You can opt to pay self employed NI contributions and this was recommended to me by a tax advisor our LA brought in - it gives you credits towards your pension etc - although I know some people use the 'low income exception' to not pay the NI.

[Catfriend]

Hi sickofthissnow. Thanks for the reply. I'm wondering what the "limit" is as per year for working tax credits. I think paying NI contributions would be in my best interest. Altho I have been looking at how much an accountant would cost me, but I now know I won't need one:)

[sickofthissnow]

Any income you receive will be taken into account when they calculate your tax credits - normally you state £0 for fostering and then state any other income you receive - they will then calculate how much you are entitled to.

If I remember correctly, the limit is circa £25k for fostering - an amount you are highly unlikely to reach so as long as your 'earn' less than that, you can legally state £0 for tax credits and on your SA return

[lovesmileandlaugh]

Slightly along the same lines, are there any pension arrangements or schemes for foster carers?

[Fosterangel]

No pension that I am aware of fostering with the LA. I do not know about IFA's.

You will need to sort out your own pension arrangements.

[Catfriend]

My only income will be for fostering would that make a difderence?? I'm not sure what the SA is?!!

[gallivantsaregood]

Tax advisor who came out from the government office told is to claim exemption for NI as we are foster carers and as such are exempt. You need a letter from your la or agency and complete a firm and you are then credited with NI credits for your pension. Will look out the form number and post. I don't have to do this as my own son is only 7 ( parents of under 12's get it too, but I get it automatically because he is disabled and I get carers allowance- also exempt and get credits)

Opting to pay NI contributions does not allow you access to any benefits etc so with filling in the form.

[gallivantsaregood]

The form is CF411A. Hope that helps

[bonnieslilsister]

SA is self assessment, your tax return

[Catfriend]

Thanks gallivantsaregood

I've asked my SSW on the money side but she doesn't know anything. I asked my SSW about contacting the LA but she seemed to think that they wouldn't be able to help either as the LA are still in talks about the "FEE"

[Fosterangel]

I think that the SSW's and LA will always refer you to the tax office as you are really self employed. Although sympathetic to the complexity of the self-assessment yearly tax form the SSW and LA do not have any responsibility for any tax or NI or pension you have to pay. This is all down to you.

I raised this issue (tax and NI) early on when we first qualified and waited ages to end up phoning the tax office who were actually very helpful.

I liked the post from gallivants that said that the tax inspector came out to see them. I still struggle with the tax and NI side of things so may try this for next year as I do not like feeling like I don't quite understand my self-employed status! I have also heard rumours that you can get the NI paid for you (whilst still registering for it) so it was good to hear this from gallivants too (form CF411A).

I have found this post from the op really helpful so thanks from me to you all!

[Catfriend]

I'm getting more confused by the day!!!!! I now understand that I have to go self employed but does anyone know if I can also get working tax credits??? I will have no other income apart from the fostering allowance??

[sickofthissnow]

Yes.. see upthread...

you can claim working tax credit as fostering is classed as a 'qualifying job'... state you work 30+ hours a week...

normally (as explained above) you can state your income from fostering is £0 and if you don't receive any other income then you will get the maximum allowance for working tax credit.

Put £0 down on your annual self assessment form too - no tax to pay!

[Catfriend]

Hi sickofthissnow thank you very much for all of your information you have gave me. I'm not that good when it comes to the money side of things. Do you know how much the maximum allowance for working tax credits is????

[sickofthissnow]

ha.. we seem to be going around in circles here ...

"If I remember correctly, the limit is circa £25k for fostering - an amount you are highly unlikely to reach so as long as your 'earn' less than that, you can legally state £0 for tax credits and on your SA return"

[Catfriend]

Thankyou very much sickofthissnow. Just one more question if you don't mind, how much roughly a week does working tax credits come to??

[sickofthissnow]

We get about £45 a week but we have other income to take into account... I've no idea what the full rate is... maybe the helpline will be able to give you a better idea...