Tax for foster carers
A clear introduction to Qualifying Care Relief.
Foster carers are generally treated as self-employed for tax. Qualifying Care Relief can mean that some or all fostering income is free of Income Tax, depending on current rates and your circumstances.
How the relief works
Compare care income with a qualifying amount.
HMRC’s qualifying amount combines a fixed household amount with weekly amounts for each child in care. If qualifying care receipts do not exceed that amount, HMRC may treat the fostering activity as making no taxable profit under the simplified method.
If receipts are higher, you may be able to use either the simplified method or calculate profit using actual allowable expenses. The right option depends on your records and wider tax position.
Practical next steps
Keep it organised from the beginning.
- 01
Register
Check HMRC requirements for registering as self-employed when you begin fostering.
- 02
Record
Keep payment statements and note placement dates, including part-weeks.
- 03
Calculate
Use the qualifying amounts published for the relevant tax year.
- 04
File
Complete the appropriate Self Assessment pages and claim relief where eligible.
- 05
Check
Ask HMRC or a qualified tax adviser if you have other income, multiple carers or unusual arrangements.
Good to know
Use the latest HMRC figures
Tax rates and relief amounts can change every tax year. This page is a general introduction and is not tax advice.
Take the first step
Could fostering be part of your story?
Ask your questions in a relaxed, confidential conversation with our Manchester team.