Fostering Income / turnover for self assessment

As a foster carer I complete a self assessment return every year noting the receipts from my foster agency (turnover) and the allowances (expenses) from HMRC and calculate profit / taxes accordingly. As part of the payments from our agency we receive £10 per child which we are told to put into a savings account for when they turn 18. This is shown as such on our payment sheet. We do this to save the agency from the admin of opening the accounts etc. I have had conflicting advice from tax specialists one saying to exclude and one saying to include this value in the turnover figure of the self assessment return. As this is not our money then it would seem logical NOT to include in the Turnover box on the self assessment form, can you confirm the correct treatment of this savings amount.

Hi,
 

Please note that all fostering income included in the end-of-year statement you receive from your Foster Agency should be declared in your Self Assessment tax return. For full details of the Qulaifying Care Relief  (ie tax exempt amount) you are entitled to, please refer to the guidance below:    Help and support for foster parents   . Thank you.

Yes i understand the qulaifying care process, i take receipts from the agency (turnover) away from the 10k allowance (expenditure) per year and the weekly allowance and input these onto the self assessment This either leaves a "profit" or "loss". My question is should I include the £10 savings that the agency ask us to save for the children in the receipts from the agency? As we effectively make a profit on the above calculation we will end up paying tax on money we have been asked to save for the children. Surely this is not correct and we should reduce our receipts by the saving amounts? Thank you

Hi

If the Agency has made clear that the '£10 savings' (to be placed in the child's bank account) does not form part of your foster care allowance, then you do not have to include the relevant amounts in the total foster care income you declare in your tax return.

You may wish to obtain written confirmation from the agency that this is the case. 

Thankyou.

Regards.

Hi there! As you mentioned, this money is not actually yours and is being put into a savings account for the child.

Hi there! As you mentioned, this money is not actually yours and is being put into a savings account for the child. While I am not a tax specialist, this payment should not be included in your turnover figure on the self-assessment form. It's always better to be safe than sorry when it comes to taxes, so you may want to consult with another tax specialist to get a second opinion. Best of luck, and thanks for being a foster carer. 

[ edited by Admin]