The Low Incomes Tax Reform Group (LITRG) broadly welcomes the Government’s ambition to see more disabled people in work, but is hugely disappointed that it has not taken the opportunity to explore tax reliefs and other changes to tax rules and practice that could help support more disabled people into work and help those already in work to stay in work.
The Government’s plan to transform disability employment over the next ten years was launched recently. Measures include widening ‘fit note’ certification, providing dedicated training for work coaches to support people with mental health conditions and reforming Statutory Sick Pay.1
But LITRG is disappointed that the new government strategy does not include amending certain tax rules or look at HMRC support for disabled people. In its response to the original green paper consultation,2 the LITRG highlighted a number of areas in the tax and related benefits system that could act as barriers to employment for disabled people (and their employers) and made recommendations.
Among these is a call for all disabled people to be able to claim as employment expenses the costs of putting themselves, as far as possible, on a par with non-disabled people. In terms of getting to work, disabled people may for one reason or another be unable to use public transport and need to use a specialist taxi service instead. Where they have a sympathetic employer, transportation to work costs that are met for them will not be classed as a taxable benefit and are therefore tax-free. However, the disabled worker cannot claim tax relief if they meet such costs personally, which seems unfair. On the basis that inaccessible transport is the second biggest barrier to employment for disabled people (after a lack of job opportunities),3 allowing the costs of specialist transport against tax would certainly go some way towards lifting it.
LITRG Chair Anne Fairpo said:
“We are disappointed that tax has largely been omitted from the Government’s disability work strategy. We think that more generous employment expenses relief and other changes to tax rules, could really help influence behaviour in this area.
“Encouraging disability employment will bring also more disabled people into contact with HMRC, and another of our concerns is that people who have additional needs may not be adequately catered for by HMRC. Having to interact with systems such as telephone voice recognition software and dealing with communications and information that may not be readily available in an accessible or understandable format may go some way to explaining why 26 per cent of the complaints the Adjudicator dealt with in the last year were from people who consider themselves disabled.4
“Disabled people in work may well have issues or queries around self-employment or part time working, tax coding problems or P800 calculations, their National Insurance record or tax credits entitlement. They need to feel that when they contact HMRC they will be treated not only fairly but flexibly and with empathy and will be able to access a method of contact that suits their needs.
“At the moment, there are pockets of support for disabled people, but it does not appear to be well coordinated or consistent. More needs to be done so nobody is left feeling disenfranchised - or worse, non–compliant - as this will only serve to work against wider policy drives like getting more disabled people working.”
Notes for editors
1. The new strategy can be found here.
2. The full LITRG submission to the original green paper can be read here.
3. See Papworth Trust report p.11 here.
4. See page nine for the Adjudicator’s equality monitoring survey here.
5. Low Incomes Tax Reform Group
The LITRG is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes.
The CIOT is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. The CIOT’s 18,000 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification.
Contact: Hamant Verma, External Relations Officer, 0207 340 2702 HVerma@ciot.org.uk (Out of hours contact: George Crozier, 07740 477 374)More Articles by Chartered Institute of Taxation (CIOT) ...