How do I complete a return for a foster carer?

You'll need to take certain things into account when completing the return, for example, the qualifying amounts that you can deduct from total care receipts.

Deductions from total care receipts include:

• £10,000 per household.
• An additional weekly amount per child/adult cared for.

Refer to the HMRC helpsheet on foster carers to guide you through the tax return as it gives useful scenarios and advice on calculating tax liability.

Below the qualifying income threshold

Where the receipts are below the qualifying income, carers relief is input as a blank self-employment schedule. The boxes referred to in the guidance are those for the Full form although it does not stipulate that the Full form has to be completed.

As the HMRC guidance provides you with box reference, we would recommend using the HMRC Forms mode method for data entry.

HMRC Forms mode: 
Please note the main instructions have been issued for the full form and the items listed within brackets are the box references for the short form.

1. Select Self-employment from the left hand navigation menu
2. Click Yes to Were you Self-Employed (but not in a Partnership)?
3. Select either the Short or Full form via the radio button displayed on screen
4. Click on Create New
5. Enter "Qualifying Carer" into Box 1 (Box 2)
6. Tick Box 4 (Box 13)
7. Enter the date that your books are made up to in Box 7 (Box 9)
8. Enter 0 into Box 9 (Box 15)

SimpleStep mode: 

1. Browse to Your Work > Self-employment
2. Enter 0 in the turnover box on-screen
3. Click on Next Step in the bottom right or Annualised Turnover on the left hand menu
4. Tick the box for "Do special arrangements apply?" (Do not tick this if you want to complete the short form)
5. Click on Next Step in the bottom right or Full Form - Details on the left hand menu (Short Form - Details)
6. Input "Qualifying Carer" in the description box (Also tick the box for Tick if you are a foster carer or shared lives carer)

Above the qualifying income threshold

If the receipts are above the qualifying income, you will need to complete the boxes as above but please also complete the additional boxes below:

HMRC Forms mode: 

Within the Self employment schedule as above, you will also need to enter the below details:

1. Complete boxes 3-14 as applicable
2. Enter in your total receipts in Box 15
3. Click on Next Step in the bottom right or Page 2 from the left hand menu
4. Enter the qualifying amount in Box 31
5. Click on Next Step in the bottom right or Page 3 from the left hand menu
6. Box 47 and 64 should already be automatically populated
7. Click on Next Step in the bottom right or Page 4 from the left hand menu
8. Box 73 and 76 should already be automatically populated.

SimpleStep mode: 

Within the Self employment schedule as above, you will also need to enter the below details:

1. Browse to Full Form - Details (if this is not applied please go to Annualised Turnover and tick the box for Do special arrangements apply? to force the full form and click on Next Step
2. Complete all boxes on screen as applicable on Full Form - Details
3. On Expenses breakdown 1, input the qualifying amount to reduce from your receipts already declared in the runover box
4. All other boxes should have automatically been populated. 

HMRC Instructions on completing the self employment pages are on page 2 of this document.

If you and your partner share care responsibilities, you may want to consider becoming a business partnership, in which case please refer to HMRC's guidance: Fostering in a Partnership .