Question about Carers Allowance and Self employment

Alrightdave

Hi all, just came across this site whilst searching for answers.

I claim carers allowance and also receive a private pension which I believe is not taken into consideration for the carers claim, and due to a pension increase I have just gone over the threshold to pay tax on it, I think I paid around 2 pounds tax last month.

I am thinking of going self employed on a part time basis so my questions are

1. How do I tell the carers allowance if I do go part time self employed, and then because the money I receive from self employment will fluctuate, do they take an average of my earnings to see if I am over (is it £196 per week I am allowed), and if so over, what period and how would I report my earnings to them? Am just thinking say I earned 300 one week, and nothing the following week, is this allowed.
2. Would I then need to add my carers allowance to my tax return to then taxed on I think its roughly around 300 a month i get?

I would think there are lots of people in the same situation and am interested to see how it works for them, as this is all new territory for me. I am at the stage of trying to work out if its worth going self employed part time or not. l am trying to be legit as I know many would say just to cash jobs, but I dont fancy looking over my shoulder for HMRC to come and say you owe us money.

thanks in advance

Dave

Rosie_Scope

Hi @Alrightdave, welcome to the community.

My understanding is that your earnings can be calculated over a trading period of either a few weeks or a year and this would need to be agreed in advance with the Carers Allowance Unit:

Contact the Carer's Allowance Unit - GOV.UK

They should also be able to advise you how it would all work and how you'd need to report your income.

When it comes to your self assessment tax return, there should be a section to report taxable benefits, that's where you'd enter your Carer's Allowance payments.

Carer's UK have some frequently asked questions and an advice helpline if that's useful to you:

Carer’s Allowance and the earnings limit | Carers UK

Alrightdave

Thank you very much indeed.

Alrightdave

Can I give an example to help me understand this.

I receive carers allowance and decide to go part time self employed say from 1st August. I speak to carers and they agree a period to look at my earnings etc, and I average under the limit until April next year. I also receive a occupational pension which I pay a very small amount of tax on via PAYE.

Lets say I earned £3000 after expenses etc to next April which is under the limit so remain on carers.

Lets say Carers is £2500 for the period I started self employment until April next year, and I put this amount in the taxable benefits box on my tax return. Does that mean potentially I pay tax £5500 at 20% as at the moment I dont think I pay any tax on carers, and pay less than £5 tax on my Pension each month as its a small pension.

I know this is not tax advice and wont be taken as such, this is just so I can understand how it works.

thanks

Dave

Alrightdave