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Increased tax allowances for foster carers!
For the new tax year, from 5 April 2026, the Government have increased the tax allowances for foster carers. This is for foster carer payments that are received by foster carers as self employment income.
The new rates have an annual allowance of £20,440, increased from £19,690. This is an effective increase by 3.8%.
Then the weekly rates are also higher for each child or young person. The weekly rate is £435 per week for a child under 11, increased from £415 per week. The weekly rate is £515 for a young person aged 11 or above, increased from £495.
The higher rates are positive to reduce the potential tax for foster carers on their income for this tax year to 5 April 2027.
Please see our page on fostering tax records for more information