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HMRC internal manual

Tax Credits Manual

Claim form-income and childcare sections- further information for foster carers



Note: From 6 April 2017, customers will only get the Family Element of Child Tax Credit where they are responsible for a child or children born before that date.

Note: The individual child element of Child Tax Credit will no longer be awarded for third and subsequent children or qualifying young persons in a household, born on or after 6 April 2017, unless it meets the exception criteria.

Note: If you are dealing with a claim where an exception marker has been applied to any of the children/young persons included in the claim or the customer is reporting a change relating to an exception contact the Exception Team (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . (This content has been withheld because of exemptions in the Freedom of Information Act 2000) For how to check if the exception marker has been applied, use TCM1000314.

Foster carers are only entitled to claim CTC for their own children, and for any other children for whom they are mainly responsible for provided they are not paid for looking after them.

Foster carers cannot claim CTC for children whom they foster whose accommodation and maintenance are paid for out of public funds.

The rules exclude a person from being treated as responsible for a child during any period when the child is provided with, or placed in, accommodation under Children Act legislation.

This exclusion covers children staying with foster carers who get foster payments for them from the local authority or via an Independent Foster care agency.

If the customer is unsure if they are paid to look after the child they should contact the local authority or foster care agency who placed the child with them.

Foster carers cannot get CTC for their foster children. They can however get CTC for any children of their own under the normal rules.


To qualify for working tax credit (WTC), a customer must be in paid work; called remunerative work.

The number of hours they must work per week depends on their circumstances.

Someone counts as being in remunerative work if they are working these hours and are either employed or self-employed, working for payment or in expectation of payment.

Foster carers are treated as self-employed. So if the customer is working as a foster carer, they can claim WTC if they are working for at least:

  • 16 hours per week if they are responsible for a child.
  • The hours of work a foster carer declares on their claim form should normally be accepted.

If the customer does more than one job, the total hours are added together.

So if a foster carer is doing work in addition to foster caring, the hours from the other work can be included if they are paid for these hours.

A customer who is self-employed can include hours spent providing services.

Also those that are necessary for self-employment, such as cleaning and book-keeping.

Income rules

The general rule is that taxable income is taken into account in calculating the customers Child Tax Credit and Working Tax Credit.

This includes the customers income from self-employment, foster carers are classed as self employed.

However, the current rules mean many UK foster carers now pay no tax on the money they earn from fostering.

If foster carers total foster care receipts are less than their qualifying amount, the income from foster caring for both tax and tax credit will be nil.

Fostering allowances which qualify for tax relief are ignored, these are

  • currently up to £10,000 per year per residence
  • £200 per week for each child under 11
  • £250 for each child 11 or over