Tax allowances for foster carers

Foster carers are self-employed. There is a specific tax scheme foster carers can use called ‘Qualifying Care Relief.’   In April 2023, the Governement significantly increased the amount of tax relief foster carers receive.   This means that the majoirty of our foster carers are exempt from paying tax on the income they receive from fostering. We pay for our approved carers to become members of ‘The Fostering Network’ who provide training and support related to completing tax returns.

Currently, when you start caring for a child, you will receive a £18,140 annual tax relief allowance, plus an additional weekly allowance for each child in your care. The amount of weekly foster care relief that you receive depends on the age of the child in your care.

HMRC provide information and guidance about tax liabilities for foster carers on their website. The example they use of a foster carer who looks after a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year, highlights this person does not have to pay tax on the first £45,290 she earns from fostering. 

Further information and a breakdown of how this calculation works.