• FOSTER

    CARER

    TAX

  • PAYROLL

  • NATIONAL

    INSURANCE

  • OTHER

    SERVICES

  • BENEFITS

    ADVICE

  • PERSONAL

    TAX

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FOSTER CARER TAX


Foster Carer Tax Matters

All Foster Carers:

  • Foster Carers are a special type of self -employed taxpayer and therefore need to prepare self-assessment tax returns
  • If you are a foster caring household then one of the adults in the household is a self –employed Foster Carer
  • If you are a couple you can choose who is the main carer for tax purposes –alternatively both parties can be Foster Carers for tax purposes
  • As self-employed people Foster Carers have to pay tax on their profit from their fostering business
  • Unlike other self-employed people a Foster Carer does not have to keep detailed records of expenses incurred in their work, they can rely on the rules set out in HMRC guideline HS236 – Qualifying care relief for carers
  • The HS236 guidelines tell Foster Carers how to calculate the income and the costs of their fostering business and gives round sum allowances as costs.
  • A Foster caring household receives £10,000 per complete tax year plus a weekly allowance based on the age of the looked after child (£200 per week/part of a week for a child aged under 11 and £250 per week for a child aged over 11.) These allowances are the annual costs of the fostering business

The generous allowances given by HS236 mean that many Foster Carers have little/no profit from their fostering businesses – If you have calculated large profits from fostering, this may be incorrect and you will pay tax unnecessarily, please call us for advice and support.

Specialist Foster Carers:

  • A Foster Carer should keep receipts for expenditure if they are a “Specialist Foster Carer”
  • A Foster Carer is considered a specialist if they are paid more than the “standard” rate per week due to their expertise as a carer or due to the special needs of the foster child
  • In either of the above circumstances the carer can claim costs which are “exceptional by nature or degree” arising from the special needs of their foster children in addition to the standard allowances

Calculating and claiming these additional costs requires a detailed understanding of your foster child’s conditions and needs. Our team of experts know all about exceptional expenses and will make the whole process straightforward –saving you time and money. Call us today for help and support

Fostering Partnerships:

  • Setting up a Fostering partnership can be advantageous in some cases – every couple’s situations are different but we can provide you with the specific advise you need – it may save you money.

Call us today for help and support 0121 794 2289

Are you a Foster Carer?…

Why not join one of our FREE Tax, Benefits & National Insurance Q&A advice sessions? Straight-forward help and tips designed for fostering families.

PAYROLL


Intellect Payroll Services

Are you a limited company struggling with payroll demands, a sole trader wanting to employ and not sure where to begin with payroll or an accountancy service looking to add to your client offer – we can help!

Getting payroll and pension matters wrong can be a costly and time consuming matter – we are here to take the stress out of this aspect of your business.

From as little as £2.50 per employee, per month (ex VAT)

What we do:

  • End to end Payroll
  • Pension Auto-Enrolment
  • P11Ds & Payrolling of Benefits
  • Yearend including production of P60’s
  • Adhoc reporting
  • Consultancy & advice

We provide a service tailor made for your business which is:

  • Fully compliant
  • End to end
  • Includes an Auto enrolment pension service

We can support:

  • Sole traders
  • Limited companies
  • Accountants and bookkeepers

So what does it cost?
 
INITIAL SET UP

TASK COST
Payroll £50
Pension £50
New HMRC £50

 
PAYROLL PROCESSING

EMPLOYEES Payslip Cost Monthly Cost Annual Cost
1-10 N/A £25.00 £300.00
11-20 N/A £45.00 £540.00
21 + £2.25

 
PENSION PROCESSING

EMPLOYEES Cost per employee Monthly Cost Annual Cost
1-10 N/A £25.00 £300.00
11-20 N/A £45.00 £540.00
21 + £2.25

(Prices ex VAT)
 
It’s about more than just ‘handling your payroll’. We become your payroll department.
Call our friendly, professional team today to discuss your bespoke needs and for a no obligation quote.
Tel: 07745 539335

NATIONAL INSURANCE

 

Paying National Insurance is important because it ensures you are entitled to state benefits and state pension

There are different classes of National Insurance:

Class 1 – paid if you are an employee (deducted from your pay on your payslip.)

Class 2 – paid by the self-employed and collected via the self –assessment system.

Class 3 – voluntary contributions paid to make up gaps in your contribution record – these are more expensive than Class 2 contributions (2020/21 Class 2 per week £3.05. Class 3 per week £15.30 per week.)

Class 4 – paid by self-employed people with high profits (over £9,500 in 2020/21)

If you are self-employed and NOT registered for self-assessment you need to call us – you may have a problem!

The key issue is that to you must have 35 years in which you have paid Class 1 or Class 2 National Insurance or received National Insurance credits in order to receive a full state pension when you reach retirement age. If you have gaps in your National Insurance record your entitlement reduces.

To find out where you stand with your National Insurance record, either check your government gateway account, if you have one, OR download and complete form BR19.

If you find you have gaps in your National Insurance record please call us for advice – do not necessarily pay expensive Class 3 weekly contributions.

Foster Carer NI:

If you are a Foster carer you are subject to special rules in regard to National Insurance. Depending on the level of your fostering profit you either pay Class 2 National Insurance contributions or obtain National Insurance credits using form CF411a – basically if you are fostering and under state pension age you can maintain your National Insurance record.

National Insurance is not “one size fits all” and can be complex to understand –please call us for specialist advice and support.

Call us for help and support 0121 794 2289

OTHER SERVICES

 

Management Accounting
We offer a competitive fixed fee service tailored to your needs around management accounting.

This service can support businesses that are expanding and need accounting expertise to produce accurate monthly accounts to monitor performance and profitability.

We can also help businesses that are subsidiaries within a group and require monthly reporting in a subscribed format.

It may be that you need external expertise in the short term whilst you plan/recruit additional inhouse accounting personnel – we can help!

Our trained staff can take the stress of reporting requirements away from you leaving you to focus on your business.

Call us today to discuss your needs and for a no obligation quotation.

 

Limited Companies

We can support small, owner managed, limited companies meet their annual statutory requirements.

For a fixed annual fee we provide a package including:

  • Preparation and filing of statutory financial statements
  • Filing the annual confirmation statement
  • Corporation tax compliance work

 

Call us for help and support 0121 794 2289

BENEFITS ADVICE

The state benefits system can be a vital support mechanism for all kind of families – do not disregard the potential for benefits to support your family.

 

How we help you:  

  • Our team of experts have a detailed knowledge of benefits matters and can guide you through the benefits system offering advice every step of the way.
  • If things go wrong we can advise you on how to challenge decisions and get your correct entitlements

Call us for help and support 0121 794 2289

 

The Benefits System

 Legacy Benefits

  • If you currently receive Income Support or Working Tax Credit these are “Legacy Benefits” so called because new claimants will not be offered these benefits.
  • You will remain on Working Tax Credit or Income Support until you either report a change in your circumstances or your postcode area moves in totality onto Universal Credit.

 

Universal Credit

  • All new benefit claimants will be offered Universal Credit.
  • Universal Credit is a means tested benefit paid to low income households to supplement their income.
  • You apply for Universal Credit online (you must create a user name and password to do so.) – if you are applying as a couple then you both make individual applications that are linked by a password generated during the process.
  • From the information supplied your household, entitlement is calculated and paid to you monthly.
  • Each claimant who is paid is placed in a conditionality group (there are 4 of these) which determines what you have to do to get Universal Credit .

 

How much will you receive per month?

Per month:

Single claimant                    £257.33            £324.84

Couple                                  £403.93            £509.91

Child (born before 6.4.17) £282.50            £282.50

Other children                    £237.08            £237.08

(You may only claim for two children except in exceptional circumstances.)

Other monthly elements are payable if your child has disabilities, if you have limited capacity for work or if you are caring for a severely disabled person.

If you live in rented accommodation your rent will be paid (called the Housing Cost Element of Universal Credit) – however the rules on payment of this element are the same as the Housing Benefit rules.

Your household entitlement is calculated and a deduction is made for a percentage (roughly 60%) of gross household income received by the household. For example, if your gross household income is £10,000 per annum (If you are a fostering household, remember fostering income is ignored) then your Universal Credit entitlement will be reduced by about £6000 per annum (£500 per month) – but you may still have some entitlement so it is worth making a claim.

N.B. This information is a guideline – Call us for more specific advice, tailored to your needs.

 

Notes regarding Foster Carers:

  • If you are a Foster Carer, the great news is that your fostering income MUST be completely ignored when calculating household income for a Universal Credit calculation.
  • Fostering is regarded as work, taking 30 hours per week but the earnings are ignored.
  • Universal Credit is paid on the basis of conditionality and a Foster Carer of a child up to the age of 16 will be in conditionality group 1 (no requirements) or group 2 (work related interviews only.) The reality of these rules is that a single Foster Carer (or the main carer in a fostering couple) simply receive Universal Credit. If their foster child is between 2-16 years of age an interview may be required to validate the claim.
  • If your youngest foster child is over 16, the standard rule is that no one needs to be at home to look after them, so at this point the carer is considered available for other work. There are exceptions, call us for more information.

 

Council Tax Relief

  • A means tested benefit payable whether you own or rent your property.
  • Council tax relief is administered by your local authority and rules may vary regarding eligibility – however this does not apply to the treatment of fostering income which must be ignored when calculating household income for the purposes of Council Tax relief.

 

Call us for help and support 0121 794 2289

PERSONAL TAX

 

Personal Tax Services

Who needs to file a tax return?

You must file a tax return if you:

  • Are self-employed as a sole – trader and earned more than £1000 (before deduction of expenses)
  • Are a partner in a business partnership
  • Rent out a property
  • Earn tips and commission
  • Have income from savings, investments and dividends
  • Have foreign income
  • Have income (or your partners income ) that is over £50,000 and you are receiving Child Benefit

If you are unsure whether you need to file a return, call us for help and support

  • Your tax return must be filed by 31 January following the end of the tax year (i.e. the tax year 2020/21 ends on 5 April 2021 and the tax return must be filed by 31 January 2022).
  • Any tax due must be paid by 31 January.
  • Failure to file the tax return on time or pay the tax due will give rise to flat rate penalties and interest charges.

If you are already in receipt of late filing penalties and interest charges please call us for help and advice. Whatever your reason for needing to prepare a tax return our team of experts will get the job done.

Take advantage of our fixed fee offer (with no added extras) and we will:

  • Prepare your self-assessment tax return using the information supplied to us
  • Supply you with your tax return ,a computation and explanatory letter
  • Advise you of your tax liability
  • Advise you on your National Insurance position
  • Once you are happy with your return and we have your authority we will file the return  with HMRC
  • We will act as your agent with HMRC and deal with all matters arising in the year (at no extra cost)
  • If you need to reclaim tax under CIS (Construction Industry Scheme) we will file your return promptly to minimize the time you wait for your refund

 

Call us for help and support 0121 794 2289

Call us today…

…for a free no obligation quote and discover how Intellect can give you peace of mind and save you money.