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Topic : Tax and NI status of Foster Carers

This topic contains 10 replies, has 7 posts, and was last updated 2 years, 3 months ago.

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  • fosterine_avatars_14


    Do all Foster Carers need to register as self employed even if they only receive Fostering Allowances and are not paid a fee. What about Family and Friends Carers?


    Good question! My understand is all fostering is classed as a self-employment therefore carers need to register as self-employed and for Class 2 National Insurance. There is lots of useful information under finances on the website too, but it might be worth checking with the HMRC!



    Thanks Leanne

    Do both myself and my husband need to register as self employed or just myself as I am the main carer?


    I think this is personal choice but normally just the main carer………… Fosterline can you help??


    Normally the main carer would only be required to register as self-employed but if you do foster with your partner it may be beneficial to trade as a partnership but only if their personal allowance is not fully utilised. The numbers would need to be crunched to see if it would be beneficial for you.
    We would always recommend individual advice from a specialist as your personal circumstances will differ from other carers.



    Does anyone know if Foster Carers still need to be registered as self employed once they are over retirement age?


    I would expect you need to be for Tax Purposes, there is a good web site for foster cares on Tax on the HMRC web site



    Am I right in thinking that Foster Carers can claim Qualifying Care Relief for both Mum and baby if they have a Parent and Child placement?



    What advice would you give to a foster carer who has not registered as self employed and not completed tax returns but has been fostering for several years? This situation is not uncommon, possibly due to lack of clear guidance from some LAs/IFAs??



    As all foster carers now have to be registered as self employed then there is no choice any more. Contact a financial advisor in the first instance for them to negotiate the best options with regard the tax office. If members of an organisation like Fostertalk or Fostering Network then within your membership there are possibly tax adviors there to help or failing that it may be prudent to get an accountant to help. It would seem harsh for the tax office to go back over the years as a foster carer’s tax status was unclear.



    It would probably be best to take independent financial advice as soon as possible from a qualified accountant with knowledge of foster carers finances. Some Foster Carers may have membership with an organisation who can provide this sort of advice or alternatively The Citizens Advice Bureau may be able to provide independent financial advice – contact details can be found on the Useful Links page of this website.

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