Income Tax (Trading and Other Income) Act 2005 section 805

Meaning of "qualifying care receipts"

Section 805 defines what counts as "qualifying care receipts" for the purposes of the foster care and other qualifying care tax relief provisions.

• Receipts must be for the provision of qualifying care, must accrue (or be received) during the relevant income period, and must be amounts that would otherwise be taxable as trading profits or as miscellaneous income
• Where the carer operates as a trade, the income period is the basis period for the tax year; otherwise it is simply the tax year itself
• Where the trade uses the cash basis of accounting, capital receipts brought into account under the cash basis rules are also treated as qualifying care receipts
• Under the cash basis, "accruing" during the income period is read as "received" during that period, reflecting the cash basis approach of recognising income when it is actually received rather than when it is earned