Self-employment and paying tax and National Insurance on fostering allowance

All foster carers in the UK, whether working with a local authority like the partners in Foster with North East, or an agency, are classed as self-employed. If you become a foster carer you will need to register with HMRC for the role. 

To make fostering an affordable choice, the Government applies a generous tax-free allowance to fostering income. In fact, as a foster carer in the North East you can expect almost all your fostering income to be exempt from tax thanks to Qualifying Care Relief. 

As a foster carer, compared to alternative employment with a similar salary, you would keep more of your fostering income.

Fostering finance facts:

• Households do not pay tax on the first  £19,360 they earn from fostering each year.
• You also receive tax relief for every week a child is in your care by age: £405 for children under 11, £485 for children aged 11 or over, £485 for each adult
• The Government gives foster carers National Insurance Credits to build a state pension.

You can find further information and an illustration of how this works, on Help and Support for Foster Parents in England