The clause makes changes to support foster carers by increasing the amount of income tax relief available to them and ensuring that that relief stays at an appropriate level over time in line with inflation. We are nearly doubling the qualifying care relief threshold, which will give a tax cut to a qualifying carer worth an average of £450 a year. I know that hon. Members are particularly interested in supporting foster carers, who are real public servants, in looking after looked-after children.

Qualifying care relief has been unchanged since 2003. Many carers are now paying income tax on payments intended to represent the additional costs of fostering that qualifying care relief was intended to exempt. Minimum fostering allowances are set to rise by 12.4% in this financial year, and with current tax threshold freezes, current qualifying care relief levels are expected to push approximately 1,500 carers into tax, which could disincentivise care. We are seeking to reflect the higher allowances that are paid to carers and the higher costs of caring compared with when the relief was set originally. By linking the value of the relief to inflation, the measure will also help to ensure that the level of qualifying care relief remains appropriate over time, supporting carers now and in the future. This will help to provide a greater financial incentive for carers to join or stay in the care industry, improving the recruitment and retention of carers in the future.

The measure increases the amount of income tax relief available for foster carers across the UK and shared lives carers using qualifying care relief from £10,000 to £18,140 per year, plus £375 to £450 per week for each person cared for. Those thresholds will be index linked to the consumer prices index. That will benefit more than 33,000 individuals who receive care income in respect of foster caring and other types of care and who currently submit self-assessment returns; such people look after an estimated 58,000 foster children.

We expect to take most care income out of tax by providing a higher level of relief. It will have simplification benefits, because it will allow more carers to use the simpler method of completing their self-employment pages on their self-assessment return. I hope that that will be a welcome improvement to the tax position of foster carers and shared lives carers. I therefore commend the clause to the Committee.