Foster Care & Tax
Support with finances
We understand that, as a foster carer, you want to make a difference to young people’s lives. The last thing you want to be doing is worrying about bookkeeping, or whether or not you need to pay tax on your allowance income.
At TACT, we’re all about providing as much information as possible, to ensure that you are fully supported with regards to finances and record keeping.
Do Foster Carers Pay Tax?
‘Do foster carers pay tax?’ is a common question we are asked.
As all foster carers are classed as self-employed, the fostering allowance they receive is taxable. However, in many cases foster carers will pay very little tax on their income from fostering. Some will even pay no tax at all.
This is because people who choose to foster are subject to a special fostering tax allowance called Qualifying Care Relief (QCR).
Fostering and tax
As you will already know, foster carers are classed as self-employed and are subject to special tax arrangements – which in most cases mean you are unlikely to pay any tax on your income from fostering.
As a reminder, there are two aspects to this Qualifying Care Relief (QCR):
| 1. Fixed Tax Exemption | 2. Weekly Tax Relief Allowance |
|---|---|
| A fixed tax exemption amount of £18,140 for each household for a full year | A weekly tax relief allowance for each child in your care: £375 per week for each child aged under 11 £450 per week for each child aged 11 or over |
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