Shekinah congratulations on your decision to become self employed.
Can you confirm whether you are going to be a sole trader or are you setting up a Ltd company?
Do you understand that if you are a sole trader you pay tax based on the taxable profits you make from your trade. If you set up a Ltd company you either pay yourself a wage and/or dividends and you pay income tax on these (PAYE and NI on wages).
The "proof" of what you earn will be the underlying books and records which you will use to either complete your sole trader income tax return or to prepare your company accounts and company tax return and therefore personal tax return.
I don't have any expert knowledge re benefits but I will try and help you clarify your questions and find some online resources to help.
I would then recommend that you get something in writing setting out what you understand the position to be and requesting a reply to confirm.
You have got 2 main questions:
What is the impact of your self employed earnings on Carer's allowance and how do you report them.
Are you entitled to WTC and how do you report self-employed income .
I would add in another question - is there an impact from hacing carers allownace and WTC?
Have you looked at Carers Allowance info on direct gov?
Was it the Carers Allowance Unit that you spoke to? Fromt that link:
Work and earnings
You cannot get Carer's Allowance if you earn more than £100 a week after money has been taken off to allow for your expenses.
Expenses that are allowed are for things like:
?some National Insurance (NI) contributions
?Income Tax
?half of any money you pay towards personal or occupational pension schemes
?other expenses you have to pay because they are a necessary part of your job
After allowing for these things, you are allowed up to half the rest of the money you earn to help meet the cost of paying someone else (but not a close relative) to look after a child or children, or the person you look after, while you are at work.
For example, you need to report:
?changes to income or employment for you or a dependent adult
There must be additional guidance from the Carers Unit because the above is quite vague.
For Working Tax Credit look here.
If you have children, you need to be aged 16 or over and do paid work of at least 16 hours a week to qualify.
If you're self-employed, paid work means any work you do for payment (or would expect to be paid) or profit.