Tax for Foster Carers and Childminders

If you earn income from caring work — whether as a foster carer, adult placement carer, or childminder — special tax rules apply to you. Foster carers and similar carers can benefit from Qualifying Care Relief, which provides generous tax-free allowances, whilst childminders can claim business expenses using specific methods designed for care provided in the home.

Who qualifies for Qualifying Care Relief?

Qualifying Care Relief is available to:

• Foster carers
• Adult placement carers
• Kinship carers
• Staying Put carers (where young people remain with former foster carers after turning 18)

This relief provides a tax-free allowance that can significantly reduce or eliminate your tax bill on caring income. It's claimed through your Self Assessment tax return.

How Qualifying Care Relief works

The relief consists of two parts: a fixed allowance and an amount per child or adult you care for.

For the 2025/26 tax year, you receive:

• A fixed allowance per household (the same amount applies regardless of how many carers live at the property)
• An additional amount for each person you care for, calculated per week

If your total caring income falls below these combined allowances, you pay no tax on your caring income. If your income exceeds the allowances, you only pay tax on the amount above the threshold.

You can choose to use Qualifying Care Relief or calculate your profit in the normal way by deducting actual business expenses. You should use whichever method gives you the lower tax bill.

Childminders: claiming business expenses

If you're a self-employed childminder, you don't qualify for Qualifying Care Relief. Instead, you claim tax relief on your business expenses like other self-employed people — but with some special rules that recognise you work from home.

The rules you follow depend on whether you use Making Tax Digital for Income Tax. You'll need to use Making Tax Digital from 6 April 2026 if your qualifying income was over £50,000 in the 2024 to 2025 tax year.

Wear and tear of household items and furniture

If you do not use Making Tax Digital: You can claim 10% of your income from caring for children in your own home to cover wear and tear on household items and furniture (such as sofas and carpets). Only count income from care provided in your home — exclude income from care elsewhere like community centres. If you claim this 10% allowance, you cannot also claim the actual cost of replacing those items.

If you use Making Tax Digital: You claim the actual amount you spent on buying, repairing or replacing household items and furniture. If you use something for both business and personal reasons, claim only the business proportion.

For example: you buy a sofa for £400 and work out that 80% of its use comes from looking after children. You can claim £320 as an expense.

Household costs

If you do not use Making Tax Digital: You can claim a percentage of your household running costs (gas, electricity, and metered water) and fixed costs (Council Tax, unmetered water, rent or mortgage interest).

The percentage depends on how many hours per week you normally care for children in your own home. Include time when you'd normally care for children at home but have taken them on trips outside (such as to a park).

If you care for children for 40 hours or more a week in your home:

• Claim 33% of running costs
• Claim 10% of fixed costs

If you care for children for less than 40 hours a week in your home:

Calculate your running costs percentage: divide the number of hours by 40, then multiply by 33. Round up to the nearest whole number.

Calculate your fixed costs percentage: divide the number of hours by 4. Round up to the nearest whole number.

For example: you normally spend 16 hours a week caring for children in your home. You can claim 14% of running costs (16 ÷ 40 × 33 = 13.2%, rounded to 14%) and 4% of fixed costs (16 ÷ 4 = 4%).

If you use Making Tax Digital: You claim a business percentage of household costs. You'll need a reasonable method of working out the percentage, such as the number of rooms you use when caring for children or the amount of time you spend caring for children in your home.

Food and drink

If you do not use Making Tax Digital: You can claim the estimated cost of food and drink you provide to the children you care for.

If you use Making Tax Digital: You can claim the actual amount you spend on food and drink provided to children for business purposes. If the food and drink is shared with your household, claim a reasonable proportion of the overall cost.

Keeping records

If you do not use Making Tax Digital: Use a cashbook and attendance register to record income and expenses. Keep receipts for all business expenses of £10 or more, and for small items bought together totalling £10 or more. You don't need receipts for food and drink provided to children, or for individual items under £10.

If you use Making Tax Digital: Keep digital records of your self-employment income and expenses following Making Tax Digital for Income Tax rules.

Sources

• Qualifying care relief for carers (Self Assessment helpsheet HS236)
• Claiming expenses and keeping records if you're a childminder

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.