The foster carer tax allowance for 2023/24, known formally as Qualifying Care Relief, gives every fostering household a fixed £18,140 tax-free amount plus a weekly sum for each child in placement: £375 a week for a child under 11, and £450 a week for a child aged 11 or over.1HM Revenue & Customs. Qualifying Care Relief Increase Most carers find their entire fostering income falls within this relief and owe no income tax on it. You still have to file a Self-Assessment return to claim it.
Who the Allowance Covers
Qualifying Care Relief isn’t just for foster carers approved by a local authority. It also covers kinship carers, “staying put” carers looking after young people beyond age 18, and shared lives carers (formerly adult placement carers). The relief applies only to payments you receive from a local authority or independent fostering agency for the care itself. Wages from a job, savings interest, or income from an unrelated business are taxed normally and sit outside this calculation.
How to Work Out Your Tax-Free Amount
Your allowance is built from two parts added together: a fixed annual amount and a weekly amount for each child.
The Fixed Amount
Every fostering household gets £18,140 for the full 2023/24 tax year (6 April 2023 to 5 April 2024). That figure is per household, not per person. If two carers in the same home each receive fostering payments in their own name, they split the £18,140 equally between them.2HM Revenue & Customs. HS236 Qualifying Care Relief If you started fostering partway through the year, the fixed amount is proportioned by the number of days you were an approved carer.
The Weekly Amount Per Child
On top of the fixed amount you add, for each child separately:
- £375 for each week caring for a child under 11
- £450 for each week caring for a child aged 11 or over
A tax week runs Monday to Sunday, and any part-week counts as a full week. A child who arrives on a Thursday and leaves the following Tuesday earns you two full weeks of relief. When a child turns 11, the higher £450 rate applies for the whole week containing the birthday.
A Worked Example
Say you cared for one eight-year-old for the full 52 weeks and one 13-year-old for 20 weeks. Your allowance works out as:
- Fixed amount: £18,140
- Child aged 8: 52 × £375 = £19,500
- Child aged 13: 20 × £450 = £9,000
- Total tax-free: £46,640
If your fostering payments for the year totalled £40,000, they fall under the £46,640 threshold. Your taxable fostering profit is nil.
If Your Income Exceeds the Allowance
You have two ways to work out what you owe, and the choice can change your bill.
Under the simplified method, you subtract your qualifying amount from your total fostering receipts and pay tax on the difference. You don’t need to track individual expenses. Report this on the Self-employment (short) pages of your return and tick the foster carer box. You can’t claim capital allowances under this method.3HM Revenue & Customs. BIM52760 – Care Providers: Qualifying Care Relief: Operation of Relief
Under the profit method, you calculate your actual expenses and capital allowances and subtract those from your receipts. If your real costs exceed the qualifying amount, this route produces a lower tax bill. The price is detailed record-keeping: food, clothing, transport, a share of household bills, equipment, everything. Report it on the Self-employment (full) pages. You cannot use Qualifying Care Relief alongside this method.4HM Revenue & Customs. HS236 Qualifying Care Relief
The simplified method suits most carers. Run the numbers both ways if you’re unsure.
Filing Your Return
Foster carers are treated as self-employed. If you’re new to fostering, register with HMRC by 5 October following the tax year you started. For a carer who began during 2023/24, that deadline was 5 October 2024.5GOV.UK. Check How to Register for Self Assessment
File online through HMRC’s Self-Assessment portal using your Government Gateway login. Use form SA103S (short) for the simplified method or SA103F (full) for the profit method. Box 4 on the SA103S confirms you are a foster carer or shared lives carer.6HM Revenue & Customs. SA103S – Self-employment (Short)
The online filing deadline for the 2023/24 return was 31 January 2025. Miss it and an automatic £100 penalty applies even if you owe no tax, with further penalties building the longer you leave it.7GOV.UK. Self Assessment Tax Returns: Penalties If you haven’t filed yet, do it now to stop those charges climbing.
The National Insurance Trap
This is where foster carers most often lose ground. If Qualifying Care Relief reduces your fostering profit to nil, you have no Class 2 or Class 4 National Insurance liability. From April 2024, the old Class 2 payment structure was removed for self-employed earners; liability to pay Class 2 no longer exists, though those with profits at or above the Small Profits Threshold are treated as having paid.8HM Revenue & Customs. NIM74150 – Class 2 National Insurance Contributions: Special Cases: Foster Parents
A nil profit also means no automatic National Insurance credits toward your State Pension. Over a long fostering career, those gaps add up. Two routes protect your record:
- Free Class 3 credits for approved foster or kinship carers looking after a child under 12, claimed on form CF411A.
- Voluntary Class 3 contributions if you don’t qualify for the free credits, at £17.75 a week for 2025/26. You can also fill gaps from earlier years, though the rate may differ depending on how far back you pay.9GOV.UK. Voluntary National Insurance: Rates
Check your National Insurance record through your personal tax account and see whether any years have gaps. The full new State Pension generally requires 35 qualifying years.
Records to Keep
Even if you expect to owe nothing, keep records. You need the total payments received from your fostering service provider, the exact arrival and departure dates for each child, and each child’s date of birth. Dates decide how many weeks you claim and which weekly rate applies; getting a child’s age wrong at the age-11 boundary shifts the calculation by £75 a week.
Hold onto these records for at least five years after the 31 January filing deadline. HMRC can open an enquiry inside that window, and without evidence they may adjust your position.
Rates for 2024/25 and 2025/26
The qualifying amounts rise each year with the Consumer Price Index. If you’re also filing for more recent years, the figures are:
2024/25
- Fixed amount: £19,360 per household
- Under 11: £405 a week
- Aged 11 or over: £485 a week
These amounts apply from 6 April 2024.10legislation.gov.uk. The Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2024 The online filing deadline for 2024/25 returns is 31 January 2026.11GOV.UK. Self Assessment Tax Returns: Deadlines
2025/26
- Fixed amount: £19,690 per household
- Under 11: £415 a week
- Aged 11 or over: £495 a week
If your income was close to the qualifying amount in 2023/24, the indexed increases in later years may have pushed it comfortably below the threshold.