My clients are a husband and wife childminding team who operate their busy childcare business as a partnership, with several employees and numerous children on their books.
They have just become full time foster carers for a child who they used to provide after-school childminding care for.
I have no experience of foster carers but I understand they receive an allowance to look after the child in their care. I would like to know whether the income they receive from the foster care would form part of their business income, and whether any additional expenses they incur through the foster care can be treated as business expenses (e.g. food, and they plan to lease an additional car to take the child to school in another town).
Or should the two income streams be treated entirely separately? If this is the case, can expenses such as vehicle and food costs be deducted from their income?
Thank you for any assistance on this query.
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I believe foster caring will be a wholly different ball game - with its own rules.
Been a little while since I have dealt with any but I believe carers get an additional 10k allowance to figure against their fostering income and can then work out profits by one of 2 methods. Simple - profit anything in excess of a set limit per child per week (limits are different based on age and any special needs), most I've seen do this method if only because they tend to try and DIY (in my, limited, experience). Profit - more traditional from an accountancy perspective - identifying all associated costs of providing care to calculate any profits.