Tax arrangements when you foster

When you start fostering, you’ll need to register as self-employed and file tax returns.

You’ll also be entitled to qualifying care relief which means you’ll:

  • earn £10,000 from fostering before you have to pay tax
  • get tax relief for every week you foster a child

There’s more information about paying tax in the guide for foster parents.

Summary of Fostering Allowances & Skills Payments 2020/21

All Foster Carers must register as for Self-Assessment with HMRC.  https://www.gov.uk/becoming-foster-parent/help-with-the-cost-of-fostering

Regular Allowances/Payments

Fostering Allowances

Age Banding Weekly Fortnightly
0-4 216.00 432.00
5-10 177.00 354.00
11-15 177.00 354.00
16-17 223.00 446.00

Foster Carers Skills Payment

Foster Carers Skills Payment Amount
Level 1 54.00
Level 2 64.00
Level 3 81.00

Mileage – 45 pence per qualifying mile.

Out of County School Meals – Reimbursed at rate paid to the school

Respite/Short-Term Care Rates

Overnight Respite Care

Age Bandings Weekly Respite Rate (75% of Fostering Allowance + £140) 1 Night Pro Rata 2 Nights Pro Rata 3 Nights Pro Rata 4 Nights Pro Rata 5 Nights Pro Rata 6 Nights Pro Rata Full Week
0-4 302.00 43.14 86.29 129.43 172.57 215.71 258.86 302.00
5-10 270.50 38.64 77.29 115.93 154.57 193.21 231.86 270.50
11-15 270.50 38.64 77.29 115.93 154.57 193.21 231.86 270.50
16-17 307.25 43.89 87.79 131.68 175.57 219.46 263.36 270.50

Scroll across to view full table

Activities Allowance – Disabled Children

£40 per weekend placement

Child Sitting / Day Care

£7.50 per hour

Mileage

45 pence per mile for the transport of foster child

Carers’ Annual Leave Allowance

For respite – equivalent to a maximum of 2 Weeks Foster Allowance & Skills Payment for qualifying carers.

Out of County School Meals

Reimbursed at rate paid to the school