Everyone in the UK receives a tax-free income allowance, currently this amount is £10,000.
On top of this personal allowance, foster carers are provided with a ‘qualifying care relief’ that can considerably raise the ‘qualifying amount’ of fostering allowance on which you are exempt from paying tax.
The qualifying amount will depend on a number of factors including how many children you have fostered or are currently fostering, the age of the foster children, and how long you were looking after them during that tax year.
Understanding foster care allowances, and carrying out a Self Assessment as a foster carer can be tricky, but as with all aspects of foster caring there is always plenty of support on hand for you.As an NFA carer you will have 24 hour access to professional advice on carer allowances and tax allowances . Alternatively HMRC will also be able to answer your questions about tax allowances, tax relief and Self Assessment; you can find out how to contact them on their website.