Foster Carer Allowances and Tax
Fostering Allowance and Tax
As foster carers you are self-employed and it is important to understand the tax implications of your role as a professional foster carer.
There are many aspects relating to being a foster carer that you will need to be aware of, particularly how HM Revenue and Customs “foster care relief” applies to you.
This relief will apply to foster carers with a foster placement which would usually be treated as income as you would be self-employed.
The relief was introduced in 2003 and still applies to current tax years.
At this point it is best we guide you to the legislation, which can be found on the HMRC website at the following address:
On this site you will find examples of foster care relief with differing numbers of foster placements that you may have. There is also information relating to National Insurance payments, Parent and Baby Schemes, Leaving Care Act arrangements and qualifying receipts.
The website is a must read site for all foster carers.