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Foster and adult placement carers: NIC and tax credits

Category Technical Articles
AuthorTechnical Department
Article by Robin Williamson, Technical Director, Low Incomes Tax Reform Group, and Kathryn Dovey, Assistant Consultant with Ernst & Young. This article appeared in the February 2004 issue of Tax Adviser. KEY POINTS

  • Foster carers and adult placement carers enjoy new tax reliefs for 2003-2004 (see Tax Adviser November 2003 and January 2004)
  • For Class NIC, their earnings will be equal to their taxable profits under the new arrangements, and their eligibility for the small earnings exception based accordingly
  • Hours engaged in caring activities are generally 'qualifying remunerative work' for working tax credit where income from caring is taxed as a self-employed activity
  • In most cases, income from caring will be treated as income for tax credits purposes only to the extent that it is taxable
  • Carers can generally claim child tax credit in respect of their own children, but not usually children or young persons in their care whose accommodation and maintenance is paid for by the local authority or out of public funds

To download the article in Adobe (pdf) format, please click on the link below.

Technical Department
020 7235 9381

February 2004 by Robin Williamson


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