Simplified method
Taxable profit is broadly qualifying care receipts minus the qualifying amount.
Ask about this typeFostering and money
Tax and Qualifying Care Relief for Foster Carers
Foster carers are generally treated as self-employed for tax purposes. You usually need to register with HMRC, keep records and file a Self Assessment return, even when no tax is due on your fostering income.
Based in ManchesterHere when you’re ready.
£20,440Fixed household amount under Qualifying Care Relief for 2026–27
£435 / £515Weekly amounts for each child under 11 and each child aged 11 or over
Self-employedFoster carers are generally treated as self-employed for tax purposes
Please read first
General information, not personal tax advice
This page provides general information, not personal tax advice. Rates change by tax year. Check HMRC guidance before submitting a return.
Tax year 2026–27
Current Qualifying Care Relief figures
Qualifying Care Relief provides a tax-free qualifying amount based on a household allowance plus an amount for each week or part-week a child is in your care.
For the 2026–27 tax year (6 April 2026 to 5 April 2027), the enacted Qualifying Care Relief amounts are:
- fixed household amount of up to £20,440 per fostering household;
- weekly amount for each child under 11: £435;
- weekly amount for each child aged 11 or over: £515.
These amounts are set by the Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2026 and appear in the government's 2026–27 rates and allowances table. They form a tax-relief calculation; they are not extra payments from Organic Fostering.
Rates checked: 9 September 2026.
How the qualifying amount is calculated
Broadly: fixed household amount + weekly amounts for each eligible child = qualifying amount.
If more than one qualifying carer lives in the same household, the fixed amount is shared. If you foster for only part of the tax year, the fixed amount is apportioned. Each part-week of eligible care is generally counted as a full week, with weeks running Monday to Sunday.
If total qualifying care receipts do not exceed the qualifying amount, HMRC generally treats the caring income as exempt under Qualifying Care Relief. Other income, such as employment, savings or property income, remains subject to the normal rules.
Illustration only
A simple example
One fostering household looks after a child aged 12 for 52 weeks during 2026–27. Using the current figures above, the qualifying amount would be £20,440 + (52 × £515) = £47,220.
If qualifying fostering receipts are below that amount, the fostering income would generally be exempt under the scheme. Personal circumstances can change the result.
What if payments exceed the qualifying amount?
HMRC normally allows two approaches. The better method depends on individual records and circumstances, so ask HMRC or a tax adviser experienced in foster care.
Profit method
Taxable profit is calculated using receipts less allowable expenses and capital allowances, without claiming Qualifying Care Relief.
Ask about this typeFor new foster carers
Registering and filing
- 01
Register as self-employed
Register as self-employed with HMRC within the required deadline.
- 02
Record payments and dates
Keep records of fostering payments and the dates children arrive and leave.
- 03
Retain your paperwork
Retain relevant statements, expenses and tax documents.
- 04
Complete Self Assessment
Complete Self Assessment each year as required.
- 05
Keep records afterwards
Keep records for the period required by HMRC.
National Insurance and State Pension
Your National Insurance position depends on taxable profit and current rules. Foster carers may be entitled to National Insurance credits that protect their State Pension record. Do not rely on historic website statements about voluntary Class 2 payments; check your record and current HMRC or DWP guidance.
Benefits and other income
Fostering payments may be treated differently across benefits and household assessments. Employment income, a partner's income, savings and the specific benefit claimed can affect the outcome. Speak with the relevant benefits office or an independent welfare adviser.
Records worth keeping
- remittance and payment statements;
- placement start and end dates;
- records of part-weeks;
- details of additional or exceptional payments;
- receipts and expenses if considering the profit method;
- HMRC registration and return confirmations;
- correspondence with a tax adviser.
Tax FAQs
Are all fostering payments tax-free?
No automatic promise can be made. Many carers pay no tax on fostering receipts because of Qualifying Care Relief, but the result depends on receipts, placements, household arrangements and the tax year.
Are foster carers employees?
For tax purposes, foster carers are generally treated as self-employed and usually file Self Assessment returns.
Does the fixed amount apply to each carer?
It is a household amount. Where more than one qualifying carer shares the household, it is divided between them under HMRC rules.
Who can give personal advice?
HMRC can explain the tax rules. For advice on your own position, use a qualified tax adviser with fostering experience.
Official sources
Use current HMRC and GOV.UK guidance for registration, deadlines, rates and the rules that apply to your tax year.
Getting help
Statements from us, personal tax advice from HMRC or an adviser
Ask us for your payment statements and general signposting. For advice on your own tax position, contact HMRC or a qualified tax adviser with fostering experience.
Take the first step
Your fostering questions can start with one conversation
Tell us what you are thinking and ask what matters to you. A member of our Manchester team will explain the next step without pressure or obligation.