HM Revenue & Customs (HMRC) treat foster carers as being self-employed which means foster carers have to pay their own Income Tax and National Insurance.
At first this may seem like a daunting prospect but HMRC have devised an online tutorial that explains what you need to know and think about in relation to tax issues when you start fostering children.
The tutorial covers the following areas: -
- What you must do when you start fostering
- How you register as self-employed using HMRC's Online Service
- The special scheme for foster carers, called Qualifying Care Relief
- How to work out your profit
- Fostering in a partnership
- What records you need to keep for HMRC
- How fostering affects Tax Credits