Fostering and CMS payments

[Mb1970]

Hi advice needed.
I'm thinking of starting the fostering process. Would any income from fostering ie allowances fees rewards be used in the calculation of CMS payments.

[Slartibartfarst]

Hi, no they wouldn't be considered as they are an allowance for the child not a taxable income.

[2016namechangeagain]

Foster carers are self-employed and need to complete self employed pages in a tax return. Due to the tax treatment of fostering then often there is no taxable profit, although those with higher allowances ie usually fostering through an agency rather than the LA, may well have a taxable profit.

I am not expert in CMS issues but I would have thought any taxable profit shown on the tax return would be counted as income. The link below shows some info on whether you would be likely to 'make a profit' on fostering.

www.gov.uk/foster-carers/help-with-the-cost-of-fostering

[Slartibartfarst]

It is very unusual to have any taxable profit unless you have more than one child placed, even if with an agency, but there would be a small profit with a sibling group etc.

[2016namechangeagain]

I am an accountant and have several clients with taxable profits from fostering. Yes most have two children through an agency to be fair.

I think it is misleading to say that it is an allowance for the child and therefore not taxable income. Every foster cater needs to be doing the calculations every year to check.

[Slartibartfarst]

Yes I agree, they do need to, as I do myself, just meant a taxable profit is unlikely unless more than one child, that's all. Not wishing to mislead anyone at all.