Back in April 2011, we wrote an article which explored some of the problems we had identified with the current Access to Work programme. Whilst tax may be considered a small issue within the programme, it has the potential to cause the disabled person and the Department for Work & Pensions (DWP) a wealth of problems. This is particularly the case where that person is self-employed.
Tax issues arise where the funding given to a disabled person who is self-employed is used to buy in the services of a support worker. This funding can be invaluable in supporting the disabled person to create a successful business. However, what is not immediately obvious is the range of tax, national insurance and employment law considerations that employing a support worker can bring.
In our original response to DWP in April 2011, we highlighted several of our concerns including poor guidance on tax related issues and a lack of understanding of the issues by Jobcentre Plus staff. Equally we were dismayed at the lack of information provided by HMRC to those who found themselves as ‘accidental employers’, compounded by the lack of knowledge within HMRC about the existence of the Access to Work programme. We made a series of recommendations to improve training and guidance for staff and to encourage closer co-operation between DWP and HMRC.
Following a review of the specialist disability employment programmes, DWP published a consultation document seeking views on the recommendations made by that review.
We particularly welcome the recommendation to establish a cross-Ministerial group to oversee the new strategy for disability employment. We think this provides a good high level structure to allow increased joint working between HMRC and DWP to tackle the tax issues affecting both departments.
We are also pleased to see the recommendation that Access to Work be promoted more widely so more people can benefit from it. However, increased take-up means that more people are likely to use the scheme in a way that attracts tax consequences.
Not laying an adequate groundwork through improvements to guidance and processes before expansion will mean some users of Access to Work may find themselves with complicated tax problems which take time for HMRC and DWP to solve as well as causing avoidable stress to vulnerable people.
Our full response can be found in our Submissions section.
(07-11-11)
Contact: Victoria Todd (please use form at http://www.litrg.org.uk/ContactUs)
