Scally wrote:I have several questions about car expenses: given that many households do not keep separate personal accounts, as all the money goes into a single pot and is then spent for the benefit of all, including the shared use of a single family car.
1. Can car lease costs be deducted either:
a) in full or
b) in part from the carers earnings as a work-related expense where a vehicle is required to do the job?
2. Can a carer use a caree's motability car to commute to work, or indeed for work-related travel?
3. Can a car lease that is actually paid for in full or in part by Motability or simply using the caree's Mobility benefits to pay for a lease also be deducted from earnings?
Thanks for your question.
Carer's Allowance earnings deductions
I am assuming that you are talking about earnings for Carer’s Allowance purposes, and whether expenses can be deducted from earnings for this purpose, although apologies if I am incorrect about this.
For Carer’s Allowance purposes, from your gross weekly earnings, the things you can deduct include:
• Income tax, national insurance contributions (Class 1, 2 or 4) and half of any contribution you make to an occupational or personal pension.
• Expenses ‘wholly, exclusively and necessarily incurred in the performance of the duties of employment’, which could include equipment, special clothing, travel between workplaces (but not travel between home and work).
If there is some element of personal use then the part of the expenses for business use can still be deducted. So for example, if you have a car and use it for your personal life as well as business, the business elements should still be able to be deducted.
For Carer’s Allowance purposes, there are also certain business expenses you can deduct for loans/hiring costs (this is in relation to those who are self-employed). There is a Decision Makers Guide which gives some examples, including:
• certain capital repayments on a loan used to
- replace an item of equipment or machinery that has worn out in the course of the business or
- become outdated or
- repair an existing asset (for these purposes an asset includes buildings, plan machinery, vehicles or equipment),
• hire or rental costs, but not any capital or purchase elements
• interest payable on a mortgage, loan, credit sale, consumer credit agreement or a hire purchase agreement - this does not include any capital element
• transport, for example business use of the car including petrol costs, road fund license, insurance and servicing, but excluding any home to work costs
Therefore, if your situation does fall within one of these points, it is certainly worth speaking to the Carers Allowance Unit to see if this is an allowable expense.
Use of the Motability Scheme
On the Motability Scheme website it says that one of the conditions of the scheme is that:
‘The car is used by, or for the benefit of, the disabled person. This does not mean that the disabled person needs to be in the car for every journey. In practice, this means other named drivers in the household can use the car for shopping and other routine activities, as long as the disabled customer will benefit.’.
It therefore does not say that a carer can use the car for employment purposes, although it is worth running it past the Motability Scheme if you feel that this is of benefit to the person you care for, just to see whether this would ever be considered in this manner (0300 456 4566).
Can Motability payments be used as expenses for Carer's Allowance
I would have thought that only expenses actually paid out can be deducted from earnings for Carer’s Allowance purposes, meaning that if the expenses have not been paid by the carer, they would not be able to be deducted.
I hope this helps. If you have any further questions then do get back in touch with the Carers UK Adviceline.