Particular Types Of Self Employment (Info)

Tax credits regulations do not provide for any departure from the method of calculating taxable profit for tax purposes for any particular self employment

Details of trading income from self employed earners should be provided by the claimant in line with the usual self assessment guidelines

Foster Carers

With effect from the tax year 2003-04, Chapter 2 of Part 7 of ITTOIA provides for new income tax relief for foster carers

Profits from foster care will be exempt from income tax in a year of assessment, if the total receipts from foster care do not exceed an individual amount based on two elements

• A fixed amount of £10,000 per year per residence

And

• A weekly amount per foster child (£200 for a child aged under 11, £250 for a child aged 11 or above)

If a person’s total receipts from foster care exceed their individual amount, they can elect to have their taxable profits calculated under

• The normal ITTOIA 2005 rules

Or

• A simplified method under which only the excess receipts over the individual amount are taxable but without relief for expenses or capital allowances

To the extent that they qualify for relief from income tax under these arrangements, foster care receipts of the tax year 2003-04 and subsequent years should be disregarded for tax credit purposes. Regulation 11(2) of the Tax Credits (Miscellaneous Amendments No 2) Regulations 2003 refers.