BIM52810 - Care providers: Adult Carers and Adult Placement Schemes: establishing profits for 2003/04 and later years

Adult carers can be divided into three main categories:

1) RESPITE CARERS

Many carers look after adults in their own home for only a short period, perhaps to give a close relative or another carer a break. This is sometimes called the Short Break Adult Placement Scheme. Although it is regarded as principally a voluntary service the carers do receive small payments on a daily basis for each guest. Under the arrangements respite carers are divided into two categories based on the number of days of care in a year. The number of days care provided in a year is calculated by adding up the number of days care per adult per year.

The first is made up of those who provide no more than 182 days of care in a particular tax year. These carers will be treated by the Inland Revenue as having no taxable profits to return.

The second category of respite carers is made up of those who provide more than 182 days care in a year. The same rules apply to these respite carers as apply to full time carers with 1-3 adults.

EXAMPLE 1:

If a carer provided 45 days care for one service user and 63 days care for a two further users this would give a total of 45 + (2 x 63) = 171 days. This carer would have less than 182 days care in that year and would therefore not have to return any taxable profits.

EXAMPLE 2:

If a carer provided 100 days care for two service users this would give a total of 100 + 100 = 200 days. This carer would have more than 182 care in that year and would therefore have to return any taxable profit using the rules for full time carers with 1-3 adults.

2) FULL-TIME CARERS WITH 1-3 ADULTS

Normally the carer has to provide the resident with a room in the carer's only or main residence and these cases will also usually continue to qualify for relief under the Rent a Room scheme. However claiming this relief will usually to be to the carer’s disadvantage if their total receipts from adult placement are more than £4,250.

Enquiries may be received about the level of acceptable expenses from carers looking after 1-3 adults in their own home who would prefer not to keep records and who:

• opt out of the Rent a Room exemption; or
• receive more than the Rent a Room limit and do not elect for the Rent a Room alternative basis to apply.

The allowable expenses of caring full time for one adult, many of whom have behavioural or learning difficulties, will be higher than those of having an ordinary lodger. Inspectors should therefore accept the following minimum expenses and allowances as the weekly cost of caring for each adult:

• £400 per week for the first adult,
• £250 per week for the second and third adults.

Alternatively an acceptable figure can be arrived at by asking the carer to record their actual expenses over a short, typical period in order to arrive at the correct level of allowable expenditure for tax purposes. Once the level of expenses has been agreed with a particular carer the agreement will stay in force whilst the carer’s situation remains broadly the same.

In the unlikely event that no agreement can be reached on an appropriate level of expenses or if the carer’s so wishes then taxable profits should be calculated using the normal basis using a full set of records.

There is additional general guidance about dealing with carer’s expenses in section two of BIM52800. The approach taken there also applies for 2003/4 and later.

3) FULL-TIME CARERS WITH MORE THAN 3 ADULTS

The normal computational rules apply so these carers are required to keep records of income and expenditure in the same way as proprietors of nursing homes or boarding houses.