Fostering Tax Benefits
Foster Parents are classed as self-employed. The government has generous tax allowances in place for those who foster and this means that you will pay little or no tax, depending on how many children you care for.
As a Foster Parent, with a child in place for the entire tax year, you could receive a considerable amount of tax relief. This is made up of three parts:
1. Your personal (tax exemption) allowance of £12,500 (2019/20)
2. A fixed tax exemption rate of £10,000, exclusive to fostering - this is shared equally among any Foster Parents in the same household
3. Additional tax relief for every week that a child is in your care:
- £200 per week per child under the age of 11 years old
- £250 per week per child aged 11 years old or over
If you are fostering a child, aged over 11 years old, you would have a tax exemption of up to £34,500 on your fostering income.
If you are fostering two children, aged over 11 years old, you would have a tax exemption of up to £47,500.
It is important to remember that each individual's financial circumstances are different. There are many elements that can affect your tax liability so its best to check with the HMRC.
More information can be found on the HMRC website, Click here