The fees element is counted as taxable income but the Government does offer tax relief for foster carers, meaning that earnings below a certain amount are tax free. For more information, download the HMRC Foster Care Relief information sheet (PDF, 351kB).
Responsibility for advising the Inland Revenue of fees received in any tax year rests with you. An annual statement of fees paid in respect of each carer can be provided by the Council.
You are also advised to retain their weekly or monthly remittance advice which details payments made.