Being a Self Employed Foster Carer
Are Foster Carers Self Employed?
We are often asked ‘are foster carers self-employed?’. The answer is yes, when you become an approved foster carer, you will need to register with HM Revenue and Customs as being self-employed for income tax self-assessment and National Insurance Contributions (NICs).
This applies to both agency and local authority foster carers, irrespective of the type of foster care you are providing and your income from fostering.
Registering as being self-employed is very straightforward and can be done online. We will be with you every step of the way to ensure that you are fully supported and will be able to answer any questions you may have.
“The thought of becoming self-employed felt very daunting. However, after approval, we were offered a self-employment taxation workshop by TACT. The workshop took us through everything including registration, how to calculate our income and how to file our return. The process was very straightforward and gave us the confidence to file our own tax accounts.”
Steven, TACT Foster Carer
How to register as self-employed
To register as being self-employed, you’ll need a national insurance number. You can then Register for Self-Assessment online.
If you are already registered as self-employed, you won’t need to register again. You would just need to inform HM Revenue and Customs that you are now also fostering. When you complete a tax return, you would need to complete a section about fostering.
If you would prefer, you can organise your own accountant to complete the registration process for you.
Foster carer National Insurance Contributions (NIC)
Foster carer National Insurance Contributions are no different to other self-employed pursuits. Although there are four types of National Insurance, only two types apply to self-employed people: Class 2 and Class 4.
As a foster carer, it is highly likely that both classes of National Insurance will apply to you. You can view the latest Class 2 and Class 4 rates.
Completing your self-assessment tax return
You will need to complete tax returns for as long as you are self-employed. Tax returns can either be completed by you, or your nominated accountant.
You will not be required to keep receipts in most cases due to completing a tax return using Qualifying Care Relief that you will be eligible for as a foster carer. Instead you will need to keep remittance slips and your annual summary.
Qualifying Care Relief will mean that, for most foster carers, you will not pay any tax on your earnings from fostering.
Start Your Fostering Journey
