You should have registered as self-employed when you started to foster. You’ll need to file tax returns. Check with your fostering service what you need to do.
In your tax return, you’ll be able to claim:
- a tax exemption of up to £10,000 per household
- tax relief for every week you foster a child
This is known as qualifying care relief.
In a tax year, households do not pay tax on the first £10,000 they earn from fostering. You’ll still pay tax on money you earn from a job or investment.
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you do not have to pay tax on some of your earnings over £10,000.
|Age of child||Tax relief|
|Under 11||£200 per child|
|11 or over||£250 per child|
Laura is a foster carer for a 14-year-old for the whole of the year and for an 8-year-old for 10 weeks of the year. She does not have to pay tax on the first £25,000 she earns from fostering:
Tax exemption = £10,000 + Child 1 (52 x £250) = £13,000 + Child 2 (10 x £200) = £2,000
Total = £25,000