UK foster carers get a tax-free fostering allowance made up of two parts: a £10,000 fixed amount per household for the tax year, plus a weekly amount for each child in your care — £200 a week for a child under 11 and £250 a week for a child aged 11 or over. Those are the 2021/22 figures; the rates rose sharply from 2023/24 onwards, and the current numbers are further down. The relief is called Qualifying Care Relief, and if your fostering payments fall within your personal threshold you pay no income tax on them. You still have to file a Self Assessment return, because HMRC treats every approved foster carer as self-employed.
How Your Tax-Free Threshold Is Built
Your threshold has two components that you add together:1GOV.UK. HS236 (2023)
- A fixed amount of £10,000 per household for the full tax year.
- £200 per week for each child under 11.
- £250 per week for each child aged 11 or over.
Weekly amounts are counted for the actual weeks (and part-weeks) each child was placed with you during the tax year. If a child turned 11 mid-year, you use £200 for weeks before the birthday and £250 for weeks after.
A Worked Example
Say you cared for one 14-year-old for the whole 52 weeks. Your threshold is £10,000 + (52 × £250) = £23,000. Fostering payments of £22,000 sit within that, so no tax is due.
A busier year: a 9-year-old placed for 30 weeks and a 15-year-old placed for 40 weeks gives £10,000 + (30 × £200) + (40 × £250) = £26,000. Anything received up to that figure is tax-free.
Two Carers in the Same Home
Where two approved carers share a household, the £10,000 fixed amount is split equally, so each carer starts with £5,000.1GOV.UK. HS236 (2023) The weekly amounts still apply in full to each placement. Each carer files their own Self Assessment return.
The relief covers foster care, kinship care, staying put arrangements, shared lives (adult placement) care, and supported lodgings that work like family care rather than a tenancy.2GOV.UK. HS236 (2025) Payments from a local authority and from an independent fostering agency are treated the same way.
If Your Fostering Income Goes Over the Threshold
Two methods are available for working out your taxable profit when receipts exceed your qualifying amount:2GOV.UK. HS236 (2025)
- The simplified method taxes you on the difference between your fostering receipts and your qualifying amount. You do not need to track individual expenses.
- The profit method ignores the qualifying amount and instead deducts your actual expenses and capital allowances from your total receipts, as any other self-employed person would.
The profit method can be worth it where real costs are high, for example larger households, significant home adaptations, or specialist equipment. You cannot mix the two: choosing the profit method for a tax year means giving up Qualifying Care Relief for that year in full.
Registering and Filing Your Return
If you are not already registered as self-employed, you must register with HMRC within six months of the end of your first tax year as an approved foster carer.3GOV.UK. Help and Support for Foster Parents in England — Tax Arrangements Registering online is the quickest route; you can also register by phone or by posting form CWF1. HMRC will send back a Unique Taxpayer Reference, which you use to file and to make any payment.
Fostering income is reported on a Self Assessment return (SA100) with the Self-employment (short) pages (SA103S) attached in most cases. The Self-employment (full) pages (SA103F) are used if you go down the profit method route and report actual expenses.2GOV.UK. HS236 (2025) Your total fostering receipts go in the turnover box, and the qualifying care relief amount is entered in the expenses section. Where receipts are within the threshold, the taxable profit box shows zero. The return still needs to go in.
Deadlines
For the 2021/22 tax year the paper deadline was 31 October 2022 and the online deadline was 31 January 2023, with any tax due payable by the same 31 January date. Later tax years follow the same pattern: paper by 31 October after the tax year ends, online and payment by the following 31 January.
The £100 Penalty Trap
Missing the Self Assessment deadline triggers penalties on a set schedule:4GOV.UK. Self Assessment Tax Returns — Penalties
- £100 fixed penalty as soon as the deadline passes.
- Daily penalties of £10 per day after three months, capped at £900.
- After six months, a further 5% of the tax due or £300, whichever is greater.
- After twelve months, another 5% of the tax due or £300, whichever is greater.
The £100 applies even when your fostering payments are fully covered by the relief and your tax bill is zero. HMRC does not waive it on the grounds that nothing was owed.
National Insurance and Your State Pension
When your fostering income falls inside the qualifying amount, HMRC treats your profit as zero. That removes any income tax and Class 4 National Insurance charge, but it also means you are not automatically building up a National Insurance record for state pension purposes.5GOV.UK. HS236 (2026) Foster carers in this position can choose to pay voluntary Class 2 contributions to protect their entitlement.6GOV.UK. NIM74150 — Class 2 NICs: Special Cases: Foster Parents The cost is a few pounds a week, and it matters most if fostering is your only work, because gaps in your record can reduce your state pension later on.
Records You Need to Keep
Keep records of every fostering payment and the dates each child was in your care for at least five years after the 31 January filing deadline for that tax year.7GOV.UK. Business Records if You’re Self-Employed — How Long to Keep Your Records For a 2021/22 return filed by 31 January 2023, that runs until at least 31 January 2028. Start and end dates for each placement, together with the child’s date of birth, are what you need if HMRC opens an enquiry.
Current Rates
The 2021/22 figures above are useful if you are catching up on an older return, but the allowance has changed. From 2023/24, the fixed amount rose from £10,000 to £18,140 per household, the weekly rate for children under 11 rose from £200 to £375, and the weekly rate for children aged 11 or over rose from £250 to £450.8GOV.UK. Qualifying Care Relief Increase The 2022/23 year still used the old £10,000, £200 and £250 rates. If you are working out a return for a year from 2023/24 onwards, use the current HS236 helpsheet from HMRC rather than the numbers on this page.