I can't seem to find any information relating to allowable expenses for foster carers. I am trying to compare both the 'Simplified Method' and 'Profit Method' but to get to the final figures for the profit method I need to know what is allowable. For instance: Childrens clothes {uniforms}, Lessons {guitar, swimming etc}, Wear & tear of furniture, Day trips/Outings.
I understand that some of this seems as though it is relating to a Childminder but it is for this reason I ask. I am unsure if any of this is similar for a foster carer.
I do apologise for asking such a simple question but I just can't seem to find any info relating to this at all
My view is that the foster carer is being paid to provide adequate care for the child. The rather generous alowance of £10k tax free is more than enough to look after a child (food, clothes, outings, presents, etc), so where is the business?
The only reason that I can see a foster carer going over the £10k (so going with the business model) is for a handicapped child. I assume that is why they left the treat as a business alternative open.
As a single parent myself I find the whole concept of regarding looking after a child that you should be treating as your own as a business, with presents regarded as an expense, quite disturbing.... On the grounds that I would probably explode at some of the things that would be expensed I think that I'll drop that one in my don't touch with a bargepole pile of professions that I will deal with. (I would no problem with doing the self assessments for foster carers using the qualifying amount approach (except that it wouldn't pay enough to be worth my time), Its just those treating it as a business and claiming expenses that I would get annoyed with).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
As a single parent myself I find the whole concept of regarding looking after a child that you should be treating as your own as a business, with presents regarded as an expense, quite disturbing.... On the grounds that I would probably explode at some of the things that would be expensed I think that I'll drop that one in my don't touch with a bargepole pile of professions that I will deal with. (I would no problem with doing the self assessments for foster carers using the qualifying amount approach (except that it wouldn't pay enough to be worth my time), Its just those treating it as a business and claiming expenses that I would get annoyed with).
As a single parent too - I totally agree!
Plus wouldnt there be a double wammy gain for some of things expensed as the foster carer is being paid to cover food/clothing etc and they are also paid additional payments fir birthdays and Christmas Gifts.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
i have a foster carer on my client list and she doesn't claim any expenses as they are covered by her payments received , they get a higher tax allowance than standard £10k so don't usually pay any tax anyway
-- Edited by Sharon Eyre on Thursday 3rd of September 2015 09:38:59 PM
Good foster carers are an invaluable help to those who need them, but I totally agree with you both on viewing it as a business. It's a vocation, and, somewhat unusually (but rightly) well paid by local authorities.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Good foster carers are an invaluable help to those who need them,
Totally agree John and all children need a home and to be loved.
Its just the whole treating them as profit centres that I find abhorent.
I personally think that with the exception of cases requiring specialist care the quite generous qualifying amount approach is what should be adopted (rather than an accounting approach).
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Thank you for your help Shamus although I already have all the information contained in the helpsheets. I'm having difficulty finding information on allowable expenses to compare the profit method with the simplified method. I'm thinking it may be the simplified route for this client but I need all facts and figures to choose correctly. I have a feeling a £2000 SCS sofa cant go through but I'm not sure where they stand regarding furnishing the childrens bedrooms, filling up with toys and books, uniforms, day trips out, swimming lessons etc. I will keep trolling the web and may have to resort to calling HMRC for a little help on this one.
Thank you for the little debate above, it is an interesting read
this might help a little- each agency has different allowances but they all basically state what they pay for so as I said earlier there is little else they should be claiming for really
Thank you Sharon, I've also been through this one already too. Apparently my client hasn't had any other payment or grant, this is why I'm not too sure what to use as actual expenses. I can't see things like Christmas presents, guitar lessons and visits to Mcdonalds being able to go through as expenses but I may be looking at it from the wrong angle :-/
Hi Dawn
Everything Ive seen before indicates that it is only worth using the profit method if you have 'very high expenses' connected with fostering. I think most people tend to avoid this given that in practice this method means the need to keep such detailed records when the focus is more likely to be on the children being cared for given some of the issues some of the children have especially when initially being placed. I found this on www.hmrc.gov.uk/courses/syob2/fc/HTML/fc_506.html via the Fostering Network website. Iss ue eg food is that you have to be able to apportion the costs directly relating to the Foster child out - hard to forecast and almost as difficult once you know what total spend for the family is!! I know that the Fostering agency will also have given your client some information so it might be worth checking to see if they have anything.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Good morning,
Sorry for not getting back sooner but been a little busy.
I finally decided on the Simplified Method. As you have all rightly stated, this is the better method. The expenses weren't very high so this route is the better option.
I'd like to say thank you to you all for your wise words and help you've given on this matter.
Thank you kindly..have a good day. No doubt I will be back soon with another query
I have 1 more question on this matter, this time it is regarding the £10,000 Fixed Qualifying Amount. It states that if you are a carer for less than a year you apportion the amount.
What I'm not sure of is: Does this mean if you foster for less than a year then stop (so only part of a year)
Or... If you start midway through the financial year?
Example: My client started fostering in July. Do I calculate to the 5th April to keep in with the financial year (July-April)...or as she continued fostering does it class as a full year from July one year to July the next?
I really hope this makes sense to someone..it sounded much better in my head!
but I'm not sure where they stand regarding furnishing the childrens bedrooms, filling up with toys and books, uniforms, day trips out, swimming lessons etc. I will keep trolling the web and may have to resort to calling HMRC for a little help on this one.
