Foster Carer Tax Calculator — Qualifying Care Relief 2025/26

Qualifying Care Relief (QCR) is a tax simplification scheme for foster carers, shared lives carers, and adult placement carers. It provides a tax-free threshold consisting of a fixed amount (£18,140 for 2025/26) plus a weekly payment per child in your care, meaning most foster carers pay little or no tax.

The 2025/26 threshold = £18,140 fixed amount + (£200/week for children under 11, or £250/week for children aged 11+) × number of children × weeks in care. If your total fostering income is below this threshold, you pay no tax on your fostering income at all.

Foster carers are treated as self-employed for tax purposes. If your profit (income minus QCR threshold) exceeds £6,725, you pay Class 2 NIC (£179.40/year for 2025/26). Class 4 NIC applies at 9% on profits between £12,570–£50,270, then 2% above.

Yes. The QCR threshold applies only to your fostering income. Other income (salary, pension, rental) is taxed normally. The QCR threshold cannot be used to offset non-fostering income.

Fostering allowances paid by the local authority or fostering agency are all counted as fostering income for QCR purposes. Any enhanced allowances, bonuses, or skill-related payments are also included.

If fostering income exceeds your QCR threshold, you can choose between two methods: (1) Fixed method — use QCR threshold and pay tax/NIC on the excess, or (2) Profit method — deduct actual expenses instead. Most carers use the fixed method as it's simpler.

Yes. Foster carers must register with HMRC for self-assessment unless their total income (fostering + other) falls below their personal tax-free allowance (£12,570 for 2025/26). HMRC recommends registering regardless to confirm tax position.

Local authority and independent fostering provider allowances vary by provider. The National Minimum Allowances set by the Fostering Network are annual guidance figures. The QCR fixed amount of £18,140 is set by HMRC for 2025/26 — check gov.uk for updates.

No. The QCR threshold applies per household, not per carer. If you foster jointly with a partner, you share the QCR threshold between you, splitting it on your self-assessment returns.

Keep records of: number of children placed, dates of placements, all payments received from local authority/agency, any expenses if using the profit method, and bank statements showing payments. Records should be kept for 5 years from the 31 January deadline.

Qualifying Care Relief only covers foster carers, adult placement/shared lives carers, and Staying Put payments. Supported lodgings and private home sharing may have different tax treatment — check with HMRC or an adviser.

Yes — the total QCR threshold almost always exceeds £18,140 because the weekly rate per child is added on top. For a carer with 2 children aged 11+ for 48 weeks: £18,140 + (£250 × 2 × 48) = £42,140 threshold, meaning significant income is tax-free.