Foster Care Tax Return Help Required

Understanding simplified method vs profit method for Foster Care Tax Return

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Hello fellow webers,

I have a new client who carries out foster care. I usually do simplified accounts for taxi drivers on a regular basis. Now the carer has FOUR Children at the age of 11+ and a 5th Child/Teenager who was in care for 7 months during the last tax period, the rest of the FOUR children he had for a full year which accounts to 52 weeks.

Now the total weeks of fostering calculated within the tax period of 19/20 comes to around 239 weeks. His care allowance includes £250/week per child at the age of 11+ plus £10,000 (Fixed Rate) per house hold. Calculation of his total QCR (Qualifying Care Relief) = £69,750

His total income from all the children in care during the tax period = £91,100

This leaves him with a net income for tax purposes of £91,100 - £69,750 = £21,350

£21,350 - £12,500 = £8,850, this figure is taxable.

Now my question is this would be considered as the simplified method of calculating his tax return, can I use other expenses such as mileage and legal fees etc as part of this method to include as I cannot find anything online to tell me if I can or cannot? The gentleman stated that what he gets paid via the QCR does not reimburse him for fuel etc

 

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Egg
By EGG
16th Apr 2020 14:59

https://www.gov.uk/government/publications/qualifying-care-relief-foster...

The above is useful and straight to the point -

you pay tax on the difference between your qualifying care receipts and qualifying amount, or;

you pay tax on your total care receipts less any expenses and capital allowances

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