Dear HM Revenue and Customs,
1. I understand that HMRC give an annual flat rate allowance of £10,000 to Shared Lives Providers & those who Foster, plus a further allowance of £250 per person placed for up to 3 people. £250 x 3 = £750 x 52 = £39,000 plus the initial £10,000 = makes a total annual allowance of £49,000 per annum; is this correct?
2. Can you please give me a breakdown of exactly what this allowance is for, what does it cover; is it for what you consider to be the equivalent of the legitimate business expenses incurred in running the bones/ bricks and mortar & replacement costs of the service to those placed, please explain how is it broken down and supply any written information legislation which explains this?
3. I know that the HMRC does not like to give money away so can you please tell me if those allowances against legitimate expenses include any component for profit or salaries / wages for the Provider or for them employing anyone in any way or are they entirely for what you have adjudged to be the legitimate physical running costs of providing the service to those placed?
4. Under normal business operating procedure, the salaries / wages of a self-employed person or any employee can only come from profits that their business makes after tax; is that correct?
5. On top of those HMRC allowances against legitimate business expenses of providing the service, a Shared Lives Provider/ Foster Parent also has his own personal allowance per annum; for 2017-2018 these are £11,500 per annum; can you please tell me where does the Services actual annual profit for paying a salary/wage to the Provider kick in; does it come at the start of this HMRC personal banding or does profit kick in after it is passed and the accounts are showing a surplus above all the allowances personal and otherwise?
Our ref: FOI2017/01677
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Dear Mark Everall,
I am writing in response to your request for information, received 16th
HMRC Freedom of Information Team