Foster Carer Tax: Qualifying Care Relief Made Simple

If the words “Self Assessment” make your shoulders tense, you’re not alone. The good news is that foster carers (and kinship, Staying Put, supported lodgings and some parent-and-child carers) have a special scheme that makes tax far simpler: Qualifying Care Relief (QCR). In many cases it means you owe no tax at all on your fostering income. Here’s the plain-English guide, with 2025/26 figures and worked examples you can copy.

What is Qualifying Care Relief?

QCR is an HMRC scheme that gives you a tax-free amount (your “qualifying amount”) for the tax year. You compare that with your total fostering receipts (allowances, fees/rewards and any other payments from your fostering provider/authority). If your receipts are below your qualifying amount, HMRC treats you as making no profit from caring — meaning no Income Tax and no Class 4 National Insurance on your fostering income. You still file a Self Assessment return and claim the relief, but the calculation is kept very simple.

The 2025/26 QCR amounts at a glance

From 6 April 2025 to 5 April 2026, your qualifying amount is made of two parts:

• A fixed household amount of £19,360 (shared if there’s more than one approved carer in the same household, and pro-rated if approved part-year), plus
• A weekly amount for each person you care for: £405 per week if the person is under 11, £485 per week if 11 or over (and for adults).

These figures are uprated annually in line with inflation, so always check the current HMRC helpsheet HS236 when you complete your return.

Who can use it?

QCR covers: foster care, kinship care, Staying Put, supported lodgings (where the relationship is “family-like”), and parent & child arrangements (even when the parent is over 18 and the child is not “looked after”). Private family arrangements and “landlord-tenant” style supported lodgings don’t qualify.

Parent & child: does the parent “count” for QCR?

Yes. HMRC’s internal manual confirms that for tax purposes the parent and each baby can be treated as being in foster care for QCR — so you add two weekly amounts in your qualifying total (one for the parent, one for the child), provided the placement is through an approved provider.

The two ways to calculate your tax

If your total fostering receipts do not exceed your qualifying amount:

• You’re treated as making no profit. You cannot claim further expenses (because you’ve already had a generous allowance), but you do still complete Self Assessment and tick the QCR boxes.

If your receipts exceed your qualifying amount, you choose between:

1. Simplified method — pay tax on (total receipts − qualifying amount). No further expenses claimed.
2. Profit method — ignore QCR, and instead pay tax on (receipts − actual allowable expenses and capital allowances). You’ll need detailed records if you pick this.

Tip: If your real costs (mileage, equipment, room use, etc.) are higher than the QCR cushion, the profit method can produce a lower bill. Otherwise, the simplified method is quicker and usually better.

Worked examples (copy these for your records)

These are illustrations only; always apply your exact dates, ages and weeks.

Example A: One carer, two children, all year

• You’re the sole approved carer all year; one child aged 9 (under 11) placed 52 weeks; one child aged 14 (11+) placed 52 weeks.
• Qualifying amount = fixed £19,360 + (52 × £405) + (52 × £485).
• That’s £19,360 + £21,060 + £25,220 = £65,640.
• If your total fostering receipts for the year are £64,000, you’re below £65,640 ⇒ no tax on fostering income under QCR. You still file and claim the relief.

Example B: Couple fostering together (share the fixed amount)

• Two approved carers in the household foster one 12-year-old for the whole year.
• The fixed £19,360 is shared between two carers, so £9,680 each. For the weekly part, each carer can add the same weeks (HMRC lets both carers use the weekly amount for the same person).
• Each carer’s qualifying amount = £9,680 + (52 × £485) = £34,,? Wait—the calculation nuance: HMRC allows both carers to count the weekly amount, but the fixed is split. (Follow HS236 when preparing individual returns.)

Practical tip: Many couples appoint one person as the “lead” for Self Assessment and allocate the fostering receipts to match. Your provider’s payment remittances will show who received what; keep these with your return.

Example C: Parent & child placement for 10 weeks

• You host a parent (over 18) and their baby for 10 weeks.
• Qualifying amount top-up = 10 × £485 (for the parent) + 10 × £405 (for the baby) = £8,900 added to your fixed amount (pro-rate the fixed if you were only approved part-year).

FAQs carers ask every year

Do I still need to file a tax return if I’m under the threshold?
Yes. You must complete Self Assessment and claim QCR. HMRC then treats you as making no profit on your fostering income.

What if I started fostering mid-year?
You pro-rate the fixed £19,360 by the days you were approved. The weekly amounts are just the number of weeks each person stayed (part-weeks count as a full week, Monday–Sunday).

Can I claim expenses as well as QCR?
Not under the simplified approach. If your real costs are unusually high, consider the profit method instead — but then you cannot use QCR in that year.

What about National Insurance?
If QCR means you’re treated as making no profit, there’s usually no Class 4 NI on fostering income. You may still pay Class 2 NI voluntarily to keep your State Pension record tidy, depending on other income. (Your HMRC return will guide you.)

I also have a job. Does QCR affect my salary tax?
No. QCR only applies to fostering receipts. Your employment income is taxed as normal through PAYE; QCR just ensures your fostering side is treated correctly.

Are my payments “allowances” or “fees”?
For tax, both the child allowance and any carer fee/reward count towards your receipts. The QCR threshold is designed to cover both together, which is why many carers end up below the threshold.

Good record-keeping (without the stress)

You won’t need a shoebox of receipts to claim the simplified QCR method—but do keep:

• Provider remittances (weekly statements showing payments and dates).
• Placement dates for each child/young person/adult (to count weeks correctly).
• Approval dates (for pro-rating the fixed amount).
• Any mileage/exceptional payments paperwork (useful if you ever switch to the profit method).

For clear, non-HMRC explainers, The Fostering Network and LITRG have accessible guides that mirror HMRC rules and help you sense-check your figures before filing.

How QCR sits alongside allowances

Remember, the national minimum fostering allowance (NMA) is about covering a child’s day-to-day costs and sits separate from tax. It’s updated each April and varies by region in England, with different frameworks in Wales, Scotland and Northern Ireland. Your tax position is then calculated using QCR on the total of allowances + fees.

Quick checklist before you file

• Confirm your approval dates and placement weeks (count part-weeks as full).
• Add up all receipts from your provider/authority.
• Calculate your qualifying amount with the £19,360 fixed (share or pro-rate if needed) + the weekly amounts (£405 or £485 per person per week).
• If receipts ≤ qualifying amount → claim QCR (simplified) and relax. If > → compare simplified vs profit method and pick the lower bill.
• Keep your statements and dates with your tax papers.

Final word

QCR exists because caring is unique work carried out in your home. Used properly, it simplifies the Self Assessment process and, for many carers, eliminates any tax due on fostering income. Bookmark the HMRC HS236 page and check it each April for the latest rates, and don’t hesitate to ask your supervising social worker or an accountant if you’re unsure which method (simplified vs profit) is best in your year.