TAX, NI & BENEFITS
FOR FOSTER CARERS

Taxes can be daunting but, with our support, you won’t have to worry about a thing.
FosterTalk members can benefit from 1-2-1 support and advice from our team of Foster Care Tax experts at BK Plus.

Members can call us on 0121 758 5013 (Mon-Fri 9am-5pm) for advice on any tax or payment related queries including:

  • Self Employed Foster Care tax
  • National Insurance
  • State Benefits
  • Fostering Allowances

Members can also access our Foster Carer Guides to Tax, NI and benefits by logging into My FosterTalk.

Not a member? Join today for as little as £1 a week for your whole fostering household.

TAX

Foster Carers are classed as self-employed which means you must register as self-employed with HMRC and file tax returns.

Foster Carers are also entitled to qualifying care relief which means you will earn £10,000 (per household) from fostering before you have to pay tax. You also get tax relief for every week you foster a child.
HMRC has special rules for foster carers to simplify the calculation of their profit, by comparing a ‘Qualifying Amount’ to their total fostering income.

Total fostering income is the total income received by the carer from their fostering agency, which includes reimbursable expenses, holiday money, birthday money and allowances.

The Qualifying Amount is the total of the following elements:
• The first element is an annual fixed rate of £10,000, which has to be apportioned if you were approved part way through the tax year.
• The second element is a weekly rate of:
• £200 per week per placement under the age of 11
• £250 per week per placement over the age of 11
If your total fostering income is less than your ‘Qualifying Amount’ then your profit is deemed as £NIL. If your total fostering income exceeds the qualifying amount, the excess is your taxable profit from fostering.

NATIONAL INSURANCE

It’s important for Foster Carers to pay National Insurance contributions. These contributions allow you to receive state benefits and a state pension at retirement age.
There are different classes of National Insurance:

Class 1 – paid if you are an employee (deducted from your pay on your payslip.)
Class 2 – paid by the self-employed and collected via the self–assessment system.
Class 3 – voluntary contributions paid to make up gaps in your contribution record – these are more expensive than Class 2 contributions (2020/21 Class 2 per week £3.05. Class 3 per week £15.30 per week.)
Class 4 – paid by self-employed people with high profits (over £9,500 in 2020/21)

BENEFITS

State benefits can provide vital support for fostering families. Benefits for Foster Carers can include Income Support or Working Tax credit (legacy benefits) or Universal Credit. All new benefit claimants will be offered Universal credit which is a means-tested benefit paid to low-income households to support their income.

You may also be able to claim:
• Disability benefits for your foster child if they meet the criteria
• Carers Allowance (if your foster child gets disability living allowance or personal independence payment)
• Council Tax relief

FREE TAX AND BENEFITS Q&A SESSIONS

To book a place on one of our free tax sessions with BK Plus, please complete the form below. We will email the link to the attendee in the week before the event.

Places are limited, so please do not book unless you are certain of attendance. 

Here are the available dates in Autumn/Winter:

  • Thursday 24th November 10.00am
  • Thursday 1st December 7.00pm

Click here to access the form!

Speak to our experts today to find out which benefits you are entitled to and how to make a claim. Members can call 0121 758 5013 or email enquiries@fostertalk.org Mon-Fri 9am-5pm

FosterTalk helped me to understand the benefits I was entitled to as a Carer. Our advisor was very helpful and jargon free.
FosterTalk Member