Once you’re approved as a foster carer, HMRC considers you self-employed. This means you’ll need to register for self-assessment and submit a tax return each year. Even if fostering isn’t your main income—or you don’t think you’ll owe any tax—registering is still essential.
But the good news? Foster carers benefit from a simplified tax system and generous tax reliefs that make the process far less daunting than it sounds.
You must register with HM Revenue & Customs (HMRC) for Income Tax self-assessment and National Insurance Contributions (NICs). This must be done by 5th October following the end of the tax year in which you were approved.
You'll need:
By form (CWF1) – Less convenient, but possible. You can fill out the form online (but not save it), then print and post it.
Most foster carers pay little to no tax, thanks to Qualifying Care Relief. This special relief simplifies the process by giving you a generous tax-free threshold, meaning:
Still unsure? Our team—and your supervising social worker—can point you to the right support.
Even if you don’t owe any income tax, you may still need to pay Class 2 National Insurance. This helps build your eligibility for benefits like State Pension, so it’s worth staying up to date.
In many cases, carers who don’t earn enough can apply for NI credits instead, so you're still building towards your future.
Registering as self-employed is just one small part of your fostering journey. You don’t need to do it alone—our advisors are here to help, and we can connect you to free tools and helplines to make it simple.
