Self Employed, WTC etc etc

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Hiya,

I know this has been discussed in another recent thread, but it may have been missed by some.

Please see: www.hmrc.gov.uk/individuals/foster-carers.htm#p

Yes you are entitled to WTC but not CTC.
Yes as they state, you are 'self employed' and therefore should pay s/e NI contributions - else you can get fined - its about £2.40 per week and will entitle you to benefits plus also keeping up your stamp for state pension. As we can state we earn £0 theoretically you could apply for exemption but as they themselves state "Please note that if you qualify for the SEE and choose not to pay Class 2 National Insurance contributions, your entitlement to Incapacity Benefit, Maternity Benefit, State Pension and Bereavement Benefit may be affected"

I have spoken to Fostering Network who seconded this information.

Fostering is qualifying work for WTC and as long as you put down a minimum of 30hrs you will qualify - income received from fostering is £0.

You will then probably have to do a self assessment for your tax return, but apparently if you do it online, there is only about 3 boxes to complete.

I know many people have been told different things and I think it can also depend on who you foster for, if you receive any other income, and what benefits you want to be entitled to (re: NI contributions).

I wish it had been clear for us at the beginning - I've spent many a hour on the phone trying to get to the bottom of it, and then finally our LA put on a briefing and someone from HMRC came & told us exactly what we had to do. They had to admit that even their own staff get confused about fostering!!

sorry to disagree but
you are only classed as SE if you are paid a wage for fostering or recieve a fee.

I have a letter here dated the 27th november 2010, it states that "any foster carer working as a volunteer, whom is recieving basic fostering allowance, is not classed as self employed and therefore is not required to make national insurance contributions.
as the monies received are for the child and are not remittence for paid employment or self employment.
if an individual recieves a fee alongside the basic allowance, it may become classed as income from self employment and as such national insurance could be payable."

the tax office know we foster and when i telephoned our local office to enquire as to whether we were classed as self employed or not that was the letter they sent to me.

so really it does depend on whom you foster for. i only receive basic allowance for the child, and as children do not pay tax or stamp, i have no income to be taxed or stamped on.

as for tax returns, if the thought of them scare you, dont be scared. they really are very easy to complete. i have been completeing my husbands now for over 15 years. if when you receive one you are frightened by the jargon, please phone the helpline listed in the guide to se in your return pack. they are very good and will help you complete it.

just to add quickly as well, if you are in receipt of income support of job seekers allowance be it income based or contribution based and you claim wtc you would autmatically lose those benefits. even though fostering is not technically working, you have claimed wtc and the dss does not see it that way. this was confirmed to me by the dwp when my friend applied to foster. she was told she would lose her income support, her housing benefit and her council tax benefit.
it is worth weighing up the pros and cons of applying first.