As of 6th April 2023, both foster carers and shared lives carers will be receiving a tax relief increase in order to provide support. It will also be ensured that the relief will stay at the appropriate amount in line with inflation.
The measure is expected to have an impact on 33,500 individuals that receive income for foster caring and other types of care. Tax bill reductions and eliminations may be seen by carers that are currently paying tax.
The previous Qualifying Care tax relief for carers comprised of:
Their share of the fixed amount, £10,000, plus
Weekly amounts for each cared-for child or adult:
Each child under 11 years of age – £200
Each child 11 years of age or older – £250
Each adult – £250
This increase sets Qualifying Care Relief for the tax year 2023 to 2024 to:
Their share of a fixed amount of £18,140, plus
Weekly amounts for each cared-for child or adult:
Each child under 11 years of age – £375
Each child 11 years of age or older – £450
Each adult – £450
The new measure increases the rates of QCR, and automatically increases these rates each tax year in line with inflation. Each tax year, starting in 2024 to 2025, these rates will increase in line with CPI inflation. The rates will be rounded to the nearest £10 for the fixed amount, and nearest £5 for the weekly amount.
This proposal attempts to ensure that carers are not taxed on income that is intended to be spent on the care of the person they are looking after by raising the amount of tax relief that carers are eligible to utilise. The purpose of raising the level of the relief is to reflect the higher costs of caring and the larger allowances being paid to carers now than they were when the relief was first set.