Do foster carers have to pay tax and National Insurance?
Foster carers should pay towards National Insurance. There’s a fixed tax exemption of up to £10,000 per year (less if for a shorter period) which is shared equally among any foster carers in the same household. This means you don’t have to pay tax on the first £10,000 income (after expenses) you make from fostering.
On top of the £10,000 exemption, you also get tax relief for every week (or part week) that a child is in your care. This means you don’t have to pay tax on some of your earnings over £10,000. Please read the Government guidelines on tax and National Insurance for foster carers.