Carer's allowance and self-employment

[Bigtoptee]

I have name changed for this.

I starting claiming carer's allowance in 2010. I am self-employed but only do a little bit of work. My accounts for 2010-2011 were below the carer's allowance income threshold so I continued to claim in 2011-2012.

In April this year I got a permanent job and stopped claiming. I wrote to the DWP and told them and my CA was stopped as requested,

I have just come to do my tax return for 2011-12 and it looks like I am over the income threshold for last year. I had no idea until I sat down and went through it all.

Does this mean I will have to notify the DWP and pay back all last year's CA?

Also, just looking into this, I saw reference to CA being taxable. I didn't put it on my self-assessment form last year.

God I've had so much on my plate this last year, I feel like I've messed up.

[MsNg]

I am self-employed and claim CA, but this hasn't happened to me yet though I've screwed up with tax credits before (didn't tell them about a change of circumstances that I thought was automatic) and they've been fine even though it was them not me that found it so I'm paying it back a tiny bit each month. There are probably more expert people on this, but I'd fess up straight away and expect to have to pay it back. I'm not sure whether you'd be able to negotiate paying it back slowly as CA and income tax probably have different rules to tax credits.

[Bigtoptee]

Thanks. I am so marginally over. I feel like I've missed something. I'll go over it again.

Do you claim for use of a room to work from home? I can't work out how to calculate that.

[AgnesDiPesto]

theres some guidance on HMRC website about claiming % electricity etc usually add up rooms (excluding some like conservatories and bathrooms) and if you use a room just for work can claim % gas / electric eg if 6 rooms qualify and you use one for work you can claim 1/6th
how often are you paid CA? weekly / monthly?
if you were employed then you would only lose carers for any week or month you earnt more than £100 after deductions (tax, NI, childcare)
I can only assume they have to apply the same rule for self employed but that depends on the self employed person working out their income / outgoings monthly or weekly when mostly we do it annually - I would suggest you go on govt website and find the small print, there must be a guide for officers
Its one of the reasons when I was self employed and claiming carers I asked to be paid weekly so if I was over the limit it I could argue I should only lose a week's money
The only way you can argue it is to work out your bills / income etc per week / month depending on frequency carers allowance is paid to you and only forgo carers for any week / month you were over
For me as I was only doing a tiny bit of paid work it was not a big job but it could be a nightmare.
Alternatively if you are just over and its not worth the hassle you could donate to charity as giftaid reduces your taxable income

[AgnesDiPesto]

sorry being thick its a tax year thats finished so too late to donate - do you have any charity subscriptions? visit anywhere that used giftaid?

[Bigtoptee]

Thanks for this.

What a nightmare! This is the problem with self-employment, you never know what you are going to earn until it is earned and even then that might be all you get for two months.

I have always just worked on the basis that I will produce the figures at the end of the year and this is all CA have asked for before (i.e for my initial claim and then the following year).

I just get a lump sum for the work I do so I can't ask clients to pay me weekly. Sometimes I don't earn for a month and then I can earn 2k the next month but I can't plan it or the work.

Yes I do have some charity subscriptions and have visited gift aid places. Can I add those up to reduce my taxable income?

[Bigtoptee]

If I want to argue that they just deduct the weeks where I have earned over £100, does that mean they will say I should have told them about this at the time?

I can't believe I missed that CA was taxable. It hasn't made much difference for last year as I'm still under the personal allowance threshold but can't they impose penalties?

I am so straight about things like this but myself and my accounts are last on my list of things to do - you know how it is.

[bigtoptee]

I just wondered if there was anyone else about with experience of this.

I rang the advice line for Contact-a-Family and waited all week for a callback. I was then told that if the CA people were not asking for my accounts as I am no longer claiming (and I actually offered to get them done early for them in April), I should sit tight.

But, I feel really uncomfortable doing that. I feel this is a genuine error and that I had not expected my earnings to be so high but that now I know I should do something.

Has anyone else had to sort out a backpayment? Or had experience of CA and being self-employed.

[SilkStalkings]

I only noticed that CA was taxable on this year's tax return too. Maybe they've re-worded things this year so it's clearer.

[inappropriatelyemployed]

I think you just get into the habit of filling certain parts of the form in too and ignoring boxes which you don't usually complete.

[Ixashe]

The CA is worked out differently to other benefits like tax credits or even income tax.

I had to give up work part way through a tax year to become a fulltime carer for my twins. The amount I had already earned in the tax year meant I was ineligible for tax credits as this is worked out on your income for the year. I was eligible for CA straight away as this was worked out on my weekly income which stopped as soon as I left work. So as long as your income before you started permanent work was less than £100 pw then you were eligible for CA and shouldn't have to pay it back.

I'm thinking of going self employed after the kids start school, I'm wondering if you can get around the difference in income for different weeks by being the sole employee of the business earning £99 pw week to balance out the income over the year and if not losing CA for certain weeks would balance out the extra accountancy fees.

[bigtoptee]

Thanks but I was self-employed for the year that I am talking about. I then got a permanent job. So, it is my self-employed accounts for last year that I am talking about.

Interesting point about CA and self-employment. I haven't set myself up as a ltd company - I do business as a sole trader so I don't do my accounts until the end of the year and deduct expenditure over the year from income.

[SilkStalkings]

I'm self employed an have had CA chasing me for regular income updates several times this year, stopping an starting the CA each time. Was finally able to send them the whole year's accounts so fingers crossed they will leave me alone for a year. Don't know why they picked on me this year when my business made pennies the previous year - like random drug tests perhaps!?