Carers are liable to tax on the profits they make and are
generally assessable under Cases I or II of Schedule D. A
significant taxable profit may arise from caring when the carer
looks after one or more adults on a full time basis. The normal
Case I rules apply in determining the amount of any taxable profit.
However, we aim to save carers who are looking after up to a
maximum of three adults in the carer's own home the burden of
keeping detailed records of expenses. For couples who carry out
their caring together this maximum figure is normally to be applied
to the number of adults cared for in the home.
Respite carers profits will usually be chargeable under Case
VI of Schedule D since the level of activity will not normally
amount to trading.
Class 4 NIC is payable if the profits assessable under Cases
I or II of Schedule D are sufficiently high. When profits are
chargeable under Case VI of Schedule D there is no Class 4 NIC
liability.
However, we aim to save carers who are looking after up to a
maximum of three adults in the carer's own home the burden of
keeping detailed records of expenses. For couples who carry out
their caring together this maximum figure is normally to be applied
to the number of adults cared for in the home.
Consequently simplified arrangements exist for establishing
the taxable profits arising to adult carers.
BIM52800+ describes these arrangements
for 2002/3 and earlier years.
BIM52805+ covers the revised
arrangements for 2003/4 and later.
For the general background to adult placement schemes see
BIM52795.
The interaction with capital gains tax is described at
BIM52815.
