It is a requirement for Foster Carers to be registered as self-employed and submit an SA302 however, the SA302 will only state the income received after allowances have been applied.
Currently, Foster Carers receive the following tax-free earnings:
Tax exemption
There is a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you do not have to pay tax on the first £10,000 income you make from fostering.
Tax relief
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you do not have to pay tax on some of your earnings over £10,000.
| Age of child | Tax relief |
|---|---|
| Under 11 | £200 per child |
| Over 11 | £250 per child |
Full details can be found here.
The SA302 will not fully reflect the income a Foster Carer earns, so income can be assessed from either a letter from the council or agency confirming the level of income, or a similar acceptable document such as pay dockets / invoices etc. Please obtain a copy and refer if needed for guidance on suitability.
