the M word --- advice needed on money matters regarding fostering.

[Rubyx]

Hi, i have had my first placement now. Had to buy a bit of essentials for the kids. What do i need to keep receipts wise? What can i do if i purchased a used item and have a hand written receipt? Was i right to give most of the stuff to the child to take home or would you have kept it for the next placement?
Please advise?

Hi Ruby, do you foster for LA or an agency? I foster for a LA and providing I'm inside my approval I have to buy all the essentials myself. I don't keep receipts because I don't get money for anything!!

I foster babies and each new placement automatically starts out at a loss - new bottles, dummies, even bibs and vests, don't come cheap.

When I moved my first placement on I sent much of her stuff with her but ever since have kept all my basic equipment back (ie pram, cot, car seat, high chair) and just send the things I wouldn't use with another baby (bottles, dummies, cups and plates, blankets, towels etc)

I know it's different for agencies, and even other LA's though, so I'd give your support worker a ring to check for sure.

My la gives £500 starter money and £ 100 for toys and thats all

Now if they ask you to get some special equipment then they pay or if we have children older than our approval and need extra things Ect

I would ask you support worker

We are all different. We just hand in receipts and the money is returned to us. That is for the first week or so in a placement. Do you have a handbook to check this out? If not just ask your sw. You shouldn't be out of pocket. You did really well done with 3, well done. You might be surprised how often you are asked to go outwith your registration and get asked to take 3 again, and again........

If i didn't have my 15 year old and 12 year old biological children i would have struggled. I am with an IFA so will get paid and buy what i need. This placement was barely for 4 days so i am fine and not out of pocket at all but any longer then i would have needed a lot more stuff.. I've just kept towels, toothbrushes in stock everything else i need to buy.

I didn't phrase my question properly. I meant as we have to show ourselves as self employed what do i need to keep to show the tax man. Would my income from fostering be the total received from IFA less what i had to buy for the children. How does that work out regarding food, electricity etc.

Hi Ruby, I'm going to some training with the tax man next week through our agency so I'll try and remember to come back and let you know :)

Sharon

can you tell me too Shaz I have buried mine and denying I need to do it....

that would be great, i want to start on the right foot but pay no more than i have to.

Thanks

Hi Rubyx, we're with an IFA and ther is NO WAY the LA is giving us any money for bits for LO, because the rates are so different to LA's rate.

I can't help much with the tax, but as far as taking things home, personally I think any items of clothing, soft toys, birthday/christmas gifts and anything specifically given to LO by us or relatives will go with her.

All the hardcore stuff like highchairs, carseats etc that we had before she arrived, we'll keep.

Would your social worker be able to help you with this? Don't worry about asking about money, nobody wants you to be out of pocket x

Re the tax thing, I highly recommend going on any courses/open days put on for you. I was nervous about paying tax before I went but the tax lady explained it all really simply.

Firstly, you MUST register as self employed. I also recommend keeping up your NI contributions, even though if you're earning very little these become voluntary. Then, in very basic terms, you have a tax allowance of £10,000 plus an additional allowance of £200 per week per child placed with you (more if they're older, but I can't remember amounts) So if you had one child all year you could earn £20,400 before you had to pay any tax. Your LA or agency should send you a letter at the end of the financial year setting out how much you were paid that year (which will include birthday/festival payments) As far as I know they didn't want receipts keeping for anything.

If you go to the HMRC website I think there's an easy guide to tax for foster carers and its nowhere near as complex as I thought it would be!

I also found of another site that you can ring Fostering Network 0800 0407675 and they gets lots of calls asking for tax questions. Lets all keep each other informed as and when we hear something. We don't want to mess with the tax man... that is the real boogey monster

Hi,

Well went on the course - sorry it took so long to get back.

Scarlet is right that you can do your tax return 2 ways: The simple way is that you have to tick you are a fostercarer on the right page on the form. Tax man said best to do everything online as it's much simpler than the paper form.

The simple way you get £10,000 allowance per year plus £200 per week per child under 11 years old and £250 per week per child over 11yrs old. PLus you get your own tax allowance which was about £7450 this year.

Using this method you do not need to keep receipts or anything. You will be able to use your end of year statement from your LA/Agency. Barnardos details it all out so it's simple task of transferring numbers from the end of year statement to tax assessment form.

If you have a child with additional needs and need to buy big pieces of equipment then you can register with the tax man as a specialist foster carer and as long as you can evidence and keep receipts you can also claim these as taxable allowances.

If you wish you can keep all receipts and do your tax return the long way, but most carers find this very cimbersome and amy not be as beneficial in terms of allowances............

Regards NI, this is where Scarlet doesn't have it quite right as fostercarers you are exempt from having to pay the self employed NI contribution. This will be credited for you if you complete form CF411A for all years from 2010. You complete and send together with a letter from your LA/Agency stating you are a fostercarer and your NI contributions will be credited to your NI account for you. This needs to be done every year.

If you have been payng NI contributions and have been a fostercarer then you can complete another form CF411 and send together with a letter from LA/Agency stating you have been a carer all of that time and a letter requesting a refund of any overpaid NI contributions and hopefully you should get it back. This only goes back a few years, but better in your pocket and al that......

However if you are in receipt of carer's allowance you will be credited for your NI contributions anyway.

Hope that all helps ......xx

Where do you get the form from Shaz?

hmm.. I'd warn against completing the form CF411A and claiming what was known as Home Responsibilities Protection (HRP).

This will only give you the ABSOLUTE minimum and count as a credit to your state pension.. it will not give you ANY entitlement to any benefits you may need to claim for... see HMRC Website

I was advised by the tax advisor who came to our LA to register as self employed and to pay class 2 self employed contributions which are only £2.50 a week... belt and braces but at that amount I think its worthwhile to be protected best we can..

We can also apply for exemption due to low income (as we can say our profit is £0) but again, you only get the absolute minimum protection ...

From previous threads on this topic, everyone seems to be told different things and I think it does depend on if you are with an LA or an IFA - if in any doubt I'd advise you to get it in writing from your local tax office and then they can't fine you (which has happened to carers I know and on here too for not registering as SE)

Hi,

You can download the form from the HMRC website. This infor came direct from a man from the tax office who regularly gives training to foster carers from both LA and IFAs. x

This is a quote from the HMRC website re class 2 contributions:

Class 2 contributions count towards certain benefits, like the basic State Pension, Maternity Allowance and Bereavement Benefit. But any claims for benefits may be affected if your payments are late.

Class 2 contributions do not normally count towards the additional State Pension, Statutory Sick Pay or Jobseeker's Allowance, so you might want to think about making other arrangements like a personal pension and income protection insurance

So, paying Class 2 NI will not mean that you are eligible for other benefits like jobseekers or anything so better off getting the form completed and having the contributions credited for you. x

Thanks for all that. I have also brought a leaflet of foster talk and will collate all this info and get moving. Thanks again