Foster carers and shared lives carers

Updated on 5 April 2023

Disabled people and carers

These pages of the website help foster carers, shared lives carers (including adult placement carers), certain kinship carers and those offering staying put care, understand how tax and National Insurance (NIC) works.

Illustration of a couple and foster child

After this we refer only to foster carers and shared lives carers but that should be read as including those other categories of carer, as appropriate.

It is important to understand that foster carers and shared lives carers are required to register with HMRC as self-employed unless they are being paid through a payroll as an employee with tax and National Insurance contributions being deducted by their employer (which is unusual).

There is a single, statutory income tax relief for all called qualifying care relief. This includes foster care, adult placement care, kinship care, staying put care and parent/child arrangements. In order to be qualifying care, the child (or adult) needs to have been placed with the carer by a local authority or an authorised social care scheme. The definition of qualifying care is provided on the pages relating to foster care and shared lives care, as appropriate.

In the following pages we explain the various reliefs and claims which are available and which will help ensure you pay the right tax. We also take a look at tax credits and universal credit.

This mini-guide is split into the following pages:

Tax guides

Share this page