Yes, when you are a foster carer, you are considered to be self employed by the OR and by HMRC (for instance you may have to pay tax if your income is great enough) and as such are dealt with in the same way as all other self employed persons. Of course all reasonable expenditure on the children as with everything else is counted against the income
I don't know - you have the child with you 24/7 and are expected to treat it as a family member and provide food, clothing etc, unlike a child minder who does run a business and can hand the child back at the end of the day.
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