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.
What does the law say on employing disabled staff?
What is Access to Work?
How does the tax system support employers of disabled people?
Are there any other tax reliefs?
As an employer, do I need to be involved in tax credits for disabled employees?
Will I have to be involved if my employee wants to claim tax credits?
I think one of my employees may be entitled to tax credits, how do they claim?
My business is struggling and I need to make changes to either hours or pay. Will this affect my
employee’s tax credits?
Where can I get more information and support about employing a disabled person?
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".
Normal-day-to-day activities includes:
- Mobility – e.g. being able to walk to the local shop
- Manual dexterity – e.g. typing
- Physical co-ordination
- Ability to lift, carry or otherwise move everyday objects
- Memory or ability to concentrate, learn or understand
- Perception of the risk of physical danger.
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. A similar scheme – Access to Work (NI) – is run in Northern Ireland.
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 under ‘help for employees’.
You can also find an Employer’s Guide to Access to Work Factsheet on GOV.UK.
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 expenses 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.
If you provide equipment or services (e.g. 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 here 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 to pay 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 some people with disabilities are given on our website here.
Employers are now able to get expert advice from the Fit for Work service, which supports them to retain greater numbers of people in work when they become sick or develop an impairment. A related tax exemption has also been introduced, so that an employer can make a contribution of up to £500 a year for each employee on medical treatments or health related interventions recommended by the Fit for Work service (or other employer-arranged occupational health service).
However, this is being funded by the abolition of the Percentage Threshold scheme from 6 April 2014, which used to allow some employers to claim some reimbursement from the Government for Statutory Sick Payments that they had to make.
You can find out more guidance for employers on the Fit for Work service and related tax exemption on GOV.UK here.
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’ but the changeover will not be complete for some time, so in the meantime some people will remain as tax credit claimants. 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 payable 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 is:
In the case of a single claim:
- the claimant is aged 16 or over and works at least 16 hours a week and:
- is responsible for a child or qualifying young person; or
- qualifies for the disability element of WTC;
- or the claimant is aged 60 or over and works at least 16 hours a week; or
- the claimant is aged 25 or over and works at least 30 hours a week.
In the case of a joint claim where there is no responsibility for a child or qualifying young person:
- the claimants are aged 16 or over and at least one of them works at least 16 hours a week and qualifies for the disability element of WTC; or
- at least one of the claimants is aged 60 or over and works at least 16 hours a week; or
- at least one of the claimants is aged 25 or over and works at least 30 hours a week.
In the case of a joint claim where there is responsibility for a child or qualifying young person:
- the claimants are aged 16 or over, and at least one of them works at least 16 hours a week and qualifies for the disability element of WTC; or
- the claimants are aged 16 or over and at least one partner works at least 16 hours a week and the total number of hours for which both partners work is not less than 24 hours a week; or
- the claimants are aged 16 or over and one partner works at least 16 hours a week and the other partner is incapacitated, in prison, in hospital or entitled to carer’s allowance; or
- at least one of the claimants is aged 60 or over and works at least 16 hours a week.
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.
No. Your employee makes the claim for tax credits by completing a TC600 claim form. 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.
From April 2014, HMRC will be using 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.
To claim, employees must fill in a TC600 claim form. This is available by calling the tax credit helpline on 0345 300 3900 (Textphone 0345 300 3909).
Previously it was possible to make claims online, however this was stopped and is unlikely to be available any time soon. It is now possible to request a claim pack online though.
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.
GOV.UK contains lots of guidance that will help employers to become more confident when attracting, recruiting and retaining disabled people. It also signposts further resources such as the Government publication on employing disabled people and people with health conditions.
GOV.UK also has details of how you can be awarded "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 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.
See here for more information on Work Choice.