Foster carer tax return: which year's figures to use

Foster carers usually pay no tax on what they are paid for fostering, because of a relief called qualifying care relief. But you still have to register, you still have to file a return, and the figures change every April. That last part is where people go wrong.

The return you are filing now covers the 2025/26 tax year (6 April 2025 to 5 April 2026) and is due online by 31 January 2027. For that return, your relief is £19,690 per household, plus £415 a week for each child under 11 and £495 a week for each child aged 11 or over. The higher figures now on GOV.UK's foster carer page (£20,440, £435 and £515) are for 2026/27, the year we are in now. They belong on next year's return, not this one.

The relief applies when a child or adult has been placed with you by a local authority, a fostering service provider, a Shared Lives provider or, in Northern Ireland, a Health and Social Care Trust. It covers foster care, kinship care, staying put care after 18, parent and child arrangements and some supported lodgings. Private arrangements with friends or relatives do not qualify. The law is in Part 7, Chapter 2 of the Income Tax (Trading and Other Income) Act 2005, sections 803 to 828.

Which figures go on which return

The fixed amount is set by section 808 of the 2005 Act and the weekly amounts by section 811. Section 828A requires them to rise with inflation each April. The 2025/26 figures come from the Income Tax (Indexation of Qualifying Care Relief Amounts) Order 2025 (SI 2025/51). The 2026/27 figures come from the 2026 Order (SI 2026/39).

Counting your weeks correctly

This is where carers most often lose relief they are entitled to. Section 811 sets the rules:

• A week runs Monday to Sunday, not seven days from the day a child arrived
• A part week counts as a whole week, both the week a child arrives and the week they leave
• The under-11 rate applies only to a week throughout which the child is under 11, so the week of the 11th birthday is paid at the higher rate

The same section decides which tax year a week belongs to: a week in which a tax year ends counts in that year. So for a child placed all year, 2025/26 gives 52 weeks but 2026/27 gives 53, because 5 April 2027 falls on a Monday. Do not assume every year is 52.

Two more adjustments. If two approved carers share a household, the fixed amount is split equally between them, which is £9,845 each for 2025/26. And if you were approved for only part of the year, the fixed amount is cut in proportion to the days you were approved.

A worked example

Sam is the only carer in the household and was approved for all of 2025/26. A 13-year-old was placed for the whole year. A 7-year-old arrived on Wednesday 3 September 2025 and left on Friday 12 December 2025. That is 101 days, but spread across 15 Monday-to-Sunday weeks.

• Fixed amount — £19,690
• 13-year-old: 52 weeks × £495 — £25,740
• 7-year-old: 15 weeks × £415 — £6,225
• Qualifying amount — £51,655

If Sam's fostering service paid £38,000 in the year, that is below £51,655, so Sam has no taxable profit from fostering. Dividing 101 days by seven and rounding down would have given 14 weeks and lost £415 of relief. Using the 2026/27 figures by mistake would have given £53,745, which is £2,090 too much.

If your receipts are more than your qualifying amount

Your receipts are everything your fostering service pays you for providing care: allowances and fees together, not just the fee. Your service should send you an annual statement after 5 April, which is the easiest place to find the total.

If that total is over your qualifying amount, you choose between two methods:

• Simplified method: you are taxed only on the difference between your receipts and your qualifying amount. You do not need expense records, and you cannot claim expenses.
• Profit method: you are taxed on receipts minus your actual expenses and capital allowances, like any self-employed person. You need detailed records, and you cannot also claim qualifying care relief.

Whichever you use, any profit is charged to income tax and Class 4 National Insurance. Had Sam received £55,000, the simplified method would make £3,345 taxable. HMRC's helpsheet points to the profit method mainly where your expenses and capital allowances are higher than your qualifying amount.

Registering and filing: the dates that matter

GOV.UK's guidance is that you should register as self-employed when you start fostering, and that you will need to file tax returns. Once you are registered, HMRC sends you a notice to file every year until you leave Self Assessment.

If you started fostering during 2025/26 and have never sent a return, tell HMRC by 5 October 2026. If you have missed that date, register anyway. HMRC will write to confirm your filing deadline, which is 31 January 2027 or 3 months from the date of their letter, whichever is later.

For most people, the deadlines for the 2025/26 return are 31 October 2026 on paper and 31 January 2027 online.

One thing you do not need to worry about yet: HMRC's helpsheet confirms that people receiving qualifying care receipts are exempt from Making Tax Digital for Income Tax in 2026/27. Our Making Tax Digital post explains what everyone else is facing.

National Insurance credits for your State Pension

If qualifying care relief means you show no profit, fostering will not add qualifying years to your National Insurance record on its own. As an approved foster carer, you can fix that by applying for Class 3 National Insurance credits under section 23A of the Social Security Contributions and Benefits Act 1992. Apply online or by post using form CF411A, with supporting evidence from your fostering service.

You get credits automatically, and do not need to apply, if you receive Universal Credit or Carer's Allowance, or are registered for Child Benefit for a child under 12.

Universal Credit and Child Benefit

If you claim benefits, tell whoever pays them that you receive a fostering allowance. Beyond that, the rules are more generous than many carers expect. Under the Universal Credit Regulations 2013, which apply in Great Britain (Northern Ireland has its own equivalent regulations):

• Fostering income does not count as income for Universal Credit (regulation 66)
• There is no child element for a child you foster (regulation 4)
• You are allowed one extra bedroom for housing costs however many children you foster, including for up to a year between placements while you stay approved (Schedule 4)

Child Benefit works differently. You cannot get Child Benefit for a child you foster if the local council is paying anything towards their accommodation or maintenance (Social Security Contributions and Benefits Act 1992, Schedule 9). You can still claim it for your own children.

England, Wales, Scotland and Northern Ireland

Qualifying care relief is part of UK income tax, so the figures on this page are the same in all four nations. GOV.UK's foster carer guide is written for England, but the tax relief it describes applies across the UK. A few differences still matter:

• Scotland: if you do end up with a taxable profit and you are a Scottish taxpayer, it is taxed at Scottish income tax rates
• Northern Ireland: placements made by a Health and Social Care Trust qualify
• After 18: the arrangement has a different name in each nation. It is Staying Put in England, When I am Ready in Wales, Continuing Care in Scotland and Going the Extra Mile in Northern Ireland. Staying put care is covered by the relief, but check with your service that your arrangement counts

What to do, in order

1. Find your annual statement for 6 April 2025 to 5 April 2026. That total is your receipts.

2. Check you are registered. If you started fostering in 2025/26 and have not told HMRC, do it by 5 October 2026, or as soon as you can if that date has passed.

3. Count each child's weeks Monday to Sunday. Count part weeks as whole weeks, and the 11th-birthday week at the higher rate.

4. Add up your qualifying amount using the 2025/26 figures: £19,690 plus £415 or £495 a week. Halve the fixed amount if two carers share the household.

5. Compare. Receipts at or below your qualifying amount mean no taxable profit. If they are above it, choose the simplified or the profit method.

6. File by 31 January 2027 online, even if you owe nothing.

7. Apply for National Insurance credits on form CF411A if you are not credited automatically.

Where to get help

Fosterline is the free, government-funded advice service for foster carers in England, on 0800 040 7675. The Fostering Network supports foster carers across the UK. The Low Incomes Tax Reform Group publishes free, independent guidance on qualifying care relief. HMRC's own helpsheet, HS236, walks through the return itself. Your fostering service can also confirm whether a placement counts.

Not sure where you stand?

Our free Foster Carer Rights checker answers questions about qualifying care relief, allowances, National Insurance credits and approval reviews, using the same 2025/26 and 2026/27 figures as this page. No login needed.