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Where Taxpayers and Advisers Meet

foster carer and tax credits.

diannedot
Posts:3
Joined:Wed Jun 20, 2018 11:23 pm
foster carer and tax credits.

Postby diannedot » Wed Jun 20, 2018 11:36 pm

I was advised by an hmrc advisor when I was renewing my tax credits that as I am a foster carer then my income would be recorded as nil. At the time I explained that I had made a profit the yr before and was told that i couldnt make a profit and that income from fostering wa not counted, I said I was worried about this and didnt want to tell her, her job but i thought that my profyt would be my income, she was adament that this was not the case and a nil amount was submitted. I have continued to do this however i recently come across advice that states that I was correct and the advisor was wrong and I should have been submitting my taxable profit that i declare on my tax return. I am now really worried that I have been commiting fraud due to advice from an HMRC advisor. I renewed my tax credits a few days ago and told them my taxable profit as my income but i.m really worried about what will happen about the previous 5 yrs.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: foster carer and tax credits.

Postby robbob » Thu Jun 21, 2018 8:36 am

Unfortunately there is no option in this regard other than to confront the situation, you will minimise the impact by contacting them and telling them what the situation is. Make it crystal clear that you followed their specific advise and that you would like their conduct and internal advise / external to be looked at the highest level possible if they will not treat you as being 100% honest in your dealings with them. If you have limited funds request that any consequence of their actions should result in past amounts being written off, if for example you have lived to the funds available based on what they told you. i would not presume any writeoff but they have completely stitched you up here if the facts are as described.
You could point out that even respectable websites like the one at the bottom of this page seem to be getting this issue wrong.

I would be very hopeful at worst that they will only clawback tax credits at a rate that you can afford if you have been overpaid.

I am presuming you are not claiming tax credits for the children you are fostering (unless they are not after by the local authority which is unlikely to be the case)

I also presume you are aware of the annual fixed amounts available that can be used to reduce income to a level than may lower than by using actual expenses.


https://www.gov.uk/government/publications/qualifying-care-relief-foster-carers-adult-placement-carers-kinship-carers-and-staying-put-carers-hs236-self-assessment-helpsheet/hs236-qualifying-care-relief-foster-carers-adult-placement-carers-kinship-carers-and-staying-put-carers-2018

The qualifying amount
The qualifying amount is made up of 2 parts:

a fixed amount of £10,000 for each household for a full year
a weekly amount for each cared for child or adult
£200 for children under 11
£250 for children aged 11 or over
£250 for each adult


Additionally in your deference even the official advise uses silly phrases like the folloiwng
This will result in many foster carers having ‘nil’ income for tax credits purposes.

https://www.gov.uk/hmrc-internal-manuals/tax-credits-manual/tcm0124100

There are also websites like the following that look like they have guidance wrong too so you will likely not be alone in

https://revenuebenefits.org.uk/tax-credits/guidance/how-do-tax-credits-work/special-circumstances/foster-carers/

diannedot
Posts:3
Joined:Wed Jun 20, 2018 11:23 pm

Re: foster carer and tax credits.

Postby diannedot » Thu Jun 21, 2018 8:57 am

Thanyou RobRob for answering, yes it was my own children I was claiming for 1 being disabled, I just feel sick about the whole thing as its alot of money and I know ignorance isnt a defence , i'm worried sick that i'll be sent to prison due to the amount involved. its just such a mess.
thankyou for getting back to me though.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: foster carer and tax credits.

Postby robbob » Thu Jun 21, 2018 9:53 am

I know ignorance isnt a defence
To be fair to you you have been told completely the wrong answer when asked so in some respects it can be a defence certain over zealous action that hmrc may take.
, i'm worried sick that i'll be sent to prison due to the amount involved
There is zero chance that anything like that will happen this is a genuine error, the only thing open for debate here is how hmrc rectify the follow on consequences of the poor advise they gave you.
It's simply a recalculation and follow on consequences of that recalculation.

The main thing though is to start the ball rolling by flagging the issue up to hmrc before they flag it up to you.

diannedot
Posts:3
Joined:Wed Jun 20, 2018 11:23 pm

Re: foster carer and tax credits.

Postby diannedot » Thu Jun 21, 2018 11:55 am

Thankyou again, I think i'll make an appointment with a tax advisor and take it from there. Its awful how your mind runs away with you and you think the worst.


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