Are Foster Carers Self Employed?

Did you know that Foster Carers are classed as self employed?

A common question we hear from our enquirers at F5 Foster Care is “are foster carers self-employed?” The short answer to this question is yes.

As a Foster Carer you will need to register as self-employed and will be responsible for paying your own taxes (if there are any due – see below). If this is something completely new to you, its quite understandable that at first it may feel quite a daunting thought. But worry not, we can provide you with training, support and guidance when registering as self-employed, and it is actually quite straight forward. This is completed online on the HMRC website.

Self Assessment and Taxes

Another question we hear is “Are fostering payments tax free”. To which, the answer is no. The likely reason someone you may of heard this however, is because of the extremely helpful tax exemptions/relief that are afforded to you as a Foster Carer, which means that you may often end up paying no tax (or very little) on your fostering income. We have added a link in to the Gov.uk page below which will explain how this works in more detail. However if you would prefer to talk to someone about this, we are, as always, on hand to answer any questions you may have so please do feel free to reach out to any of our team.

In short though Fostering households have a tax exemption of £10,000, (this tax exemption is specific for fostering allowances so does not affect your tax personal allowances) you will also receive further tax relief of up to £250 for each week that you have a child in placement (This tax relief is £200 per week per child you have fostered who is under the age of 11 and £250 per week per child aged 11 or over)

We will share an example below

Laura is a Foster Carer for Paige who is 14 years old. Paige is on a long term placement with Laura so has been with her all 52 weeks of the year:

Tax Exemption = £10,000 + Tax relief for Paige (52 x £250) = £13,000

As you can see above, Laura has a total of £23,000 of tax free fostering allowance before she needs to class any of her payments as “taxable income” So if Laura was being paid £420 per week to care for Paige her total annual income for fostering would be £21,840.00 meaning there would be no taxable income.

For more information about this you can click here to see the gov.uk guidance or as mentioned above you can speak to the F5 Foster Care team who are happy to help. You can reach us on 0121 2710555 or visit our website https://f5fostercare.co.uk

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