Help for employers
There are over 10 million disabled people in the UK and you may be considering employing a disabled person for their abilities, skills or experience. In this section, we look at the support, tax related and otherwise that employers can access, or in the case of tax credits, can assist their employees in accessing.
Under the Equality Act (EA) 2010 no employer may treat less favourably a disabled person in terms of recruiting, training, promotion, dismissal or redundancy than any other person.
This may mean that in order to take on a disabled employee, or retain one who has become disabled whilst in work, you need to make reasonable adjustments to enable a disabled person to carry out a particular job, so that they are not disadvantaged.
In determining whether it is reasonable for an employer to take a particular step in order to meet the requirements of the Act, particular regard will be given to the extent to which it is practicable for the employer to take the steps, the extent of the employer's financial and other resources and so on.
A 'disabled person' is legally defined as someone with 'a physical or mental impairment that has a substantial and long-term adverse effect on his/her ability to carry out normal day-to-day activities'.
You can find guidance on the definition of disability under the Equality Act on GOV.UK.
Some examples of reasonable adjustments are:
- Altering the person's working hours
- Allowing absences during working hours for medical treatment
- Giving additional training
- Getting special equipment or modifying existing equipment
- Changing instructions or reference manuals
Most adjustments are simple and low or no cost – such as raising or lowering pieces of furniture or allowing someone to use a car parking space. Not every disabled person needs sophisticated equipment or support, and if they do, the Access to Work scheme can help to fund this.
Access to Work is a specialist, government-financed disability programme. It covers England, Scotland and Wales and can give grants towards extra employment costs. A different system is run in Northern Ireland.
Access to Work can help fund things like the cost of specialist equipment and alterations to premises or a working environment to make it more accessible.
Although payments are often made to employers to help pay for support provided to the disabled employee, it is the employee who has to apply for the grant. You can therefore read about the scheme in more detail in our ‘help for employees' section.
You can also find an Employer’s Guide to Access to Work Factsheet on GOV.UK.
Please note that the Equality Act 2010 places a duty on an employer to make reasonable adjustments for disabled employees. Access to Work funding cannot be used to support these adjustments.
Access to Work will also not fund items which are regarded as standard equipment, standard business costs or standard health and safety requirements. This means that any item which would normally be needed to do the job, whether a person is disabled or not, will not be paid for.
How does the tax system support employers of disabled people?
The Equality Act 2010 (EA) requires employers to make ‘reasonable adjustments’ to help any disabled employees and these can cover both changes to the workplace or employment arrangements.
The cost of making many of these adjustments would qualify for tax relief as a business expense either as a revenue expense, or through capital allowances.
Examples of revenue expense include the cost of large print documents and training on disability issues. These are fully deductible for tax purposes. Examples of capital expenses include installation of ramps and hand rails. HMRC give guidance on capital allowances and examples of the tax treatment of particular types of expenditure on GOV.UK.
This guidance is equally relevant to the reasonable adjustments you would need to make under the EA where your business provides goods, services and facilities direct to disabled customers.
Please note that while VAT zero-rating is available for modifications to certain areas of the home for disabled people, no corresponding relief is available in the UK VAT law in respect of workplace modifications undertaken by an employer. Although this may not be an issue for employers who are able to recover input tax in full, VAT costs could be incurred by those unable to, e.g. exempt or partly exempt employers (e.g. banks and other financial institutions etc.)
You may be interested to read our submission to the Government’s work, health and disability green paper in which we called for changes to these rules.
Are there any other tax reliefs?
If you provide equipment or services (for example, a hearing aid or wheelchair) to a disabled employee, with the main purpose of enabling them to perform their duties of employment, you will have no reporting requirements and no tax or National Insurance contributions (NICs) to pay under benefit in kind rules, even if they use it privately (whereas if the employee did not have a disability this would not usually be the case). The rules ensure that no tax charge arises on this benefit when provided to an employee with a disability, even if the employee uses the equipment both in work and outside work, and private use is significant.
You can find out more on GOV.UK.
An employer of a disabled person is also able to provide a car (including the provision of fuel and other related expenses) to an employee with a disability with no reporting requirements and no tax or NICs provided certain conditions are met. You can also meet certain costs free of tax to the employee such as for travel from home to work, which would normally be classed as a benefit in kind and taxed as such.
Details of these and the other minor adjustments to the tax law to take into account the needs of people with disabilities are given in the 'help for employees' section of our website.
As an employer, do I need to be involved in tax credits for disabled employees?
As an employer, you may wonder why you need to worry about tax credits. It is true that since March 2006 employers have not had any direct role to play in tax credits. Prior to that date, working tax credit was paid through wages by employers, however since then payment has been made directly to claimants.
The tax credits system is gradually being replaced by ‘Universal Credit’ (UC). UC is due to finish rolling out for new claims by January 2019. Existing tax credit claimants will be transferred across to UC sometime between July 2019 and March 2023 unless they have a change of circumstances that means they need to claim UC earlier or they choose to claim UC. Therefore tax credits are still very important for low income workers, particularly those with disabilities. As well as meaning employees can receive additional money, tax credits can help employees with disabilities to remain in work when they may otherwise have been forced to leave.
As explained in the 'help for employees' area of our website, tax credits are made up of working tax credit (WTC) and child tax credit (CTC). WTC is paid to workers whether or not they have children and CTC is payable to people who are responsible for a child whether they are in work or not.
It is important that you understand tax credits, as an employee’s entitlement can depend on the number of hours they work. The criteria are explained further in the 'working tax credits' section of our website.
As you can see, if your employee qualifies for the disability element of tax credits they can qualify by working at least 16 hours instead of the usual 30. A disabled employee working 15 hours per week cannot claim tax credits, whereas by working 16 hours they may qualify.
Similarly, once they qualify by meeting this basic criteria, they can get extra tax credits (called the 30 hour element) if they work at least 30 hours per week.
Will I have to be involved if my employee wants to claim tax credits?
No. Your employee makes the claim for tax credits by completing a TC600 claim form (this is available by calling the Tax Credit Helpline on 0345 300 3900 (Textphone 0345 300 3909). They will have to provide details about their work on the form.
At any time when tax credits are in payment, HMRC may check your employees tax credits award. They may ask for things like a P60, P45, P11D.
In addition, HMRC can ask employers to provide evidence in relation to a tax credit claim. If this happens, HMRC will write to you stating what documents they need to see in relation to the employees claim.
HMRC now use information sent to them by employers through the Real Time Information (RTI) system to finalise tax credit claims. It means that the information you send to HMRC through RTI will directly affect your employee’s tax credits claim. If any information is wrong, their tax credits claim may be wrong.
My business is struggling and I need to make changes to either hours or pay. Will this affect my employee’s tax credits?
Any changes to hours or pay can impact on tax credits. It is therefore important to tell your employees to seek advice from a local advice agency such as the Citizens Advice Bureau as to how any potential change may impact on their tax credits.
Where can I get more information and support about employing a disabled person?
GOV.UK contains lots of some guidance that will help employers to become more confident when attracting, recruiting and retaining disabled people.
There is a collection of resources about employing disabled people including the Government publication on employing disabled people and people with health conditions and information how the Disability Confident employer scheme can help your business.
GOV.UK also has details of how you can be awarded the disability confident symbol (this has replaced "two ticks") – the scheme which shows you encourage applications from disabled people.
The Department for Work and Pensions' Jobcentre Plus provides information and advice to employers to support them in adopting good employment policies and practices in the recruitment, retention, training and career development of disabled people.
Talk to a Disability Employment Adviser (DEA) at a Jobcentre Plus for further advice on employing disabled people.
You can also talk to a DEA about the Work Choice scheme (not in Northern Ireland or Scotland where different schemes are available). Work Choice can help you to employ a disabled person who needs specialist support. A provider will work with you to develop a package of support specially designed for your business and the individual with the aim of developing their skills.
There is more information on Work Choice on GOV.UK.