Disabled people who take up the option of an individual budget which they then choose to spend according to their needs can get caught up in the tax system, for example as employers of their carers.
LITRG has therefore called for tightening of draft regulations for ‘trailblazer’ local authority pilots to ensure that there is clear responsibility to provide tax help and support.
One of LITRG’s areas of focus is how disabled people fare in the tax system. As part of our work we have produced a number of reports, covering both general issues and more specific areas such as VAT and direct payments.
Independent living and a person’s right to control their own care (for example, by deciding how to spend a ‘direct payment’) continue to move forward, and consultation was launched earlier this year by the Office for Disability Issues (part of the DWP) on draft regulations for local authorities chosen as Right to Control ‘Trailblazers’.
LITRG’s response to the consultation - entitled ‘Making choice and control a reality for disabled people’ – highlights that more could have been gained from earlier consultations and research to inform and improve the current pilots. Provision of good information and support is a cornerstone of Right to Control and to conduct further pilots without this being in place does not give the best chances to disabled people.
Our recommendations are therefore as follows:
- Further discussions should be undertaken with HMRC and interested parties to ensure that, where a disabled person is represented by a ‘suitable person’, HMRC recognise them as an intermediary.
- We strongly believe that a further requirement should be included in the regulations that local authorities must provide details of the responsibilities of a disabled person taking up their Right to Control.
- Regulations ought to require authorities to ensure that the disabled person understands the conditions of taking a direct payment and again not leave this to non-statutory guidance.
- Guidance should stipulate that before a disabled person becomes responsible for a Disabled Facilities Grant, any VAT issues should be investigated by the local authority.
We are concerned that the duration of the pilot (two years) may not be long enough for any significant best practice to be developed. Nevertheless, to achieve best results the participating authorities should facilitate the sharing of experiences.
In conclusion, to make choice and control a reality, users of direct payments must be supported in understanding tax issues resulting from their choices and the regulations should make the authorities responsible for providing such support.
To read the full response, follow the link below.
Contact Name: Jan Tish ((Tel: 0844 579 6700 Fax 0844 579 6701)
To open the file click below:
LITRG response to Right to Control Trailblazer Regulations consultation
