How do I complete a return for a foster carer?

You need to take certain things into account when completing the return, for example, the qualifying amounts that you can deduct from total care receipts.

Deductions from total care receipts (2024) include:

• £18,140 per household.
• a weekly amount for each cared for child or adult
  • £375 for children under 11
  • £450 for children aged 11 or over
  • £450 for each adult

Refer to the HMRC helpsheet on foster carers to guide you through the tax return as it gives useful scenarios and advice on calculating tax liability.

Below the qualifying income threshold

Where the receipts are below the qualifying income, carers relief is input as a blank self-employment schedule.  HMRC guidance provides you with a box reference, we recommend using HMRC Forms mode method for data entry. 

HMRC Forms Mode:

Please see the instructions below when using the Full form or Short form within your Self-Employment schedule.

HMRC Forms Mode - Full Form

1. Select Self Employment from the left hand navigation menu
2. Click Yes to Were you Self-Employed (but not in a Partnership)?
3. Select Full form and Create New
4. Input 'Qualifying Carer' into Box 2
5. Tick Box 13- If special arrangements apply, put X in the box
6. Enter relevant date in to Box 9 - Date your books or accounts are made up to or the end of your accounting period
7. Enter 0 in to Box 15 – Your turnover

HMRC Forms Mode - Short Form

1. Select Self Employment from the left hand navigation menu
2. Click Yes to Were you Self-Employed (but not in a Partnership)?
3. Select Short form and Create New
4. Input ‘Qualifying Carer’ in to Box 1
5. Tick Box 4 - If you are a foster carer or of shared lives carer, put ‘X’ in the box
6. Enter relevant date in to Box 7 - Date your books or accounts are made up to or the end of your accounting period
7. Enter 0 in to Box 9 – Your turnover

Simple Step Mode: 

Simple Step Mode - Full Form:

1. Browse to Your Work > Self Employment
2. Enter 0 in to the box Please enter your turnover for the accounting period
3. Click on Next Step in the bottom right hand corner to reach the page Annualised Turnover
4. Tick the box Do special arrangements apply?
5. Click on Next Step in the bottom right hand corner to reach the page Full Form - Details
6. Input 'Qualifying Carer' in the box Description of Business
7. No further action required

Simple Step Mode - Short Form

1. Browse to Your Work > Self Employment
2. Enter 0 in to the box Please enter your turnover for the accounting period
3. Click on Next Step in the bottom right hand corner to reach the page Annualised Turnover
4. Do not tick the box Do special arrangements apply?
5. Click on Next Step in the bottom right hand corner to reach the page Short Form - Details
6. Input 'Qualifying Carer' in the box Description of Business
7. Tick box for Tick if you a foster carer or shared lives carer

Above the qualifying income threshold

If the receipts are above the qualifying income, you will need to complete the boxes as above but please also complete the additional boxes below:

HMRC Forms Mode - Full Form: 

Within the Self employment schedule as above, you will also need to enter the below details:

1. Complete boxes 3-14 as applicable
2. Enter in your total receipts in Box 15 Your Turnover
3. Click on Next Step in the bottom right hand corner of the page to enter Page 2
4. Enter amount for Total expenses in Box 31
5. Click on Next Step in the bottom right hand corner of the page to enter Page 3
   1. Boxes 47 and 64 should now be automatically populated
6. Click on Next Step in the bottom right hand corner of the page to enter Page 4
   1. Boxes 73 and 76 should now be automatically populated​​​​​​

Simple Step Mode - Full Form: 

Within the Self employment schedule as above, you will also need to enter the below details:

1. Browse to Full form – Details.  Please note, if the full form is not applied then please go to Annualised Turnover (menu on the left hand side) and tick the box Do special arrangements apply? This will force the Full form and then click on Next Step
2. Complete all boxes on screen on Full Form – Details as applicable
3. Expenses breakdown 1 >Total expenses – entered so far box
4. All other boxes should now be automatically populated for you

HMRC Instructions on completing the Self - Employment Pages are on Page 2 of this document.

If you and your partner share care responsibilities, you may want to consider becoming a business partnership, in which case please refer to HMRC's guidance: Fostering in a Partnership