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Do HMRC really care about the long-term sick?

Published on 11 October 2005

A year ago we pointed out in our article on this website Revenue incapable on incapacity benefit how their information and service for those claiming this benefit was totally inadequate. We had the impression that "something would be done" but it seems we were mistaken.

Are we perhaps being harsh? After all, they are an important government department, with a lot on their plate. Why don't you be the judge?

All we asked a year ago was that people receiving incapacity benefit could receive accurate information about the tax treatment of the benefit they were receiving and that this should be easy to obtain.

We asked because we had seen a number of recipients who had been badly advised by HMRC and had been paying tax incorrectly on their very low incomes.

So what do we find now?

HMRC website

A search on "incapacity benefit" will refer you to a section "Tell me about ....incapacity benefit". Unfortunately it does nothing of the sort. In fact, it merely directs you to a claim for Statutory Sick Pay on the DWP website. Is this adequate treatment for over 2 million of their customers?

Written material

If you were lucky, you might find out that HMRC used to have a leaflet on incapacity benefit (IR144) but this was withdrawn on cost grounds. HMRC advice (in the withdrawn leaflets section on their website) is that you should refer to the DWP leaflet IB1. In that 68 page leaflet there is a not very helpful description of the tax treatment and a reference back to consulting your own tax office and the "Inspector of Taxes" for further information.

HMRC Helplines

We tried to ask six HMRC offices about the tax position of incapacity benefit. We made 24 calls, but were only able to get through to two offices. A very poor service in itself, but the subject of another article to appear here shortly.

Both offices we spoke to were helpful but their replies were incomplete. Neither mentioned the long term tax free incapacity benefit for those who were receiving the former invalidity benefit in April 1995.

General help for those with disabilities

We are not generally surprised at this overall response for incapacity benefit as since the publication of our report 'Disability in Tax and Related Benefits: The Case for a Modern and Coherent Approach' not much movement has taken place. Our subsequent mystery shopping has shown negligible improvement in HMRC service for those with disabilities, despite promises to the contrary.


Contact Name: John Andrews (Tel: 0844 579 6700 , Fax: 0844 579 6701)


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