Posts Tagged ‘disabilities’


Consultation on vulnerable beneficiary trusts

November 9, 2012

Trying to catch up with the flurry of October/November consultations, I see I missed one that closed yesterday.  I’m hoping that, closing on Thursday, they’ll still be able to consider responses that they receive on, erm, Friday!  Anyway, this is what I sent.  I’m not sure whether there’s anything in the changes to tax treatment of trusts for people who are unable to manage their own financial affairs that is, by and of itself, offensive – I’m aware that it’s the changes to the benefits themselves (replacing DLA with PIP) which are considered offensive by people with disabilities.  But there are two things that jump out at me about this consultation.  One is the governmental, or rather departmental, muddle.  If you have different definitions of disability or vulnerability in different departments and for different purposes, should you – in the twenty first century, for goodness’ sake – expect a government to be able to get its act together and define what it means for ALL its purposes, not just for some?  Or, if that gives too much of a cliff edge between categories, shouldn’t you at least let the tax treatment follow the definitions used for other purposes rather than making people faff about considering a whole new set of tax requirements for something that isn’t really anything to do with tax at all?  And, second… the consideration of equality seems to be rubbish.  I say “seems to be” because, to be charitable, it’s possible they’ve done a ton of great work behind the scenes but just written it up really badly.  But to me it  reads as if they’ve gone “Oh, the DWP did all that.  Just stick in an “it’s all right, isn’t it?” question and leave it at that.”  Tell me I’m wrong.

Anyway, this is the response I sent.

I appreciate that the closing date for this consultation was in fact yesterday but I hope you will nevertheless be able to include it in your considerations. This is an individual’s response and will also be published, with commentary, on my blog at Please note there are some questions where either I consider I do not have sufficient expertise to contribute to the discussion or else I have covered the question separately in narrative and I have therefore excluded those questions (so the numbering below doesn’t follow, but IS the numbering taken from your consultation document)

Q2: Do respondents have suggestions for defining a ‘vulnerable person’ for tax purposes other than by reference to orphaned minors and those with a severe physical or mental disability? (Responses may include approaches and concepts found elsewhere that could be included into the tax code either in combination or in isolation.)

It seems quite plain to me that tax is the least of the matters which a vulnerable person ought to be concerned with, and that therefore the best way of implementing the objective of this consultation is for the tax treatment to “follow” – in other words, that the legislation defining people to whom these tax exemptions should apply should follow the other defining legislation.

In other words, government should get its act together and define vulnerability for all purposes, or at least work under the presumption that meeting a definition for one purpose would also meet it for all other government (or at the very least for tax!) purposes.

In drafting terms, you might say something like “A vulnerable person for these purposes is someone in the Vulnerable Persons list,” and then have a separate command paper or other statutory instrument kept up to date with the definitions found elsewhere in the law. So the first “vulnerable persons list” might read
– persons in receipt of enhanced rate PIP
– persons [defined as in the enhanced criminal record certificates legislation]
– persons listed in the [relevant provisions of the] Safeguarding Vulnerable Groups Act 2006

Q3: In relation to those suggestions, what practical issues do respondents envisage applying them in the context of a self-assessed tax; and how could they be overcome?

In practical terms, there are three things government should do

1. not require self assessment from a vulnerable person but from their trustees
2. not require self assessment from the trustees of a vulnerable person except at (say) five yearly intervals or when there is a material change in circumstances, and
3. set up and resource fully an assistance unit within HMRC devoted to providing vulnerable persons and their trustees with direct assistance in self assessment, including but not limited to a dedicated mailing address and the provision of the telephone number, email address and other contact details of a named person in HMRC who will provide them with assistance

Q4: Do respondents agree that including recipients of the enhanced rate daily living component of PIP within the vulnerable person definition would achieve certainty in the same way the existing reference to DLA does?

Yes, but would restrict the number of people included in the vulnerable persons group as that is one of the design objectives of moving to PIP. This should NOT be one of the design objectives of this legislation, so the definition needs to be broader, and therefore to “follow” other definitions of vulnerability.

Q6: What are respondents’ views on whether the proposal for PIP might lead to a suitable test, or part of a test, for assessing whether someone should be able to benefit from access to the tax treatment for vulnerable persons’ trusts? (Responses should have regard to the characteristics that distinguish a vulnerable person.)

PIP is intended to apply to fewer people than the current benefits regime and therefore the definition of a vulnerable person would be unreasonably restricted if this were the ONLY qualification for treatment as a vulnerable person. See response to 2, above – in my view the definition should follow any other definition in current legislation, so that a person defined as “vulnerable” for ANY government purpose should also be defined as vulnerable for tax purposes.

Q7: Is the existing ‘mental incapacity’ test suitably targeted? If not, why not?

No opinion, but didn’t you consult on this very recently, in the consultation on removing the offensive language (“lunatic”) from the Taxes Acts? Is it necessary to revisit at this point, and if so I strongly suggest you re-examine the responses to the previous consultation.

Q8: What alternative approach would respondents propose and why? (Responses need not be limited to suggestions that make use of MCA05.)

See above. Follow the definitions in other legislation so that there is no separate “hurdle” for tax.

Q10: Do respondents see any reason why the ‘application of capital’ conditions should not require the vulnerable beneficiary to benefit from every application of the capital during the lifetime (or other relevant period) of the vulnerable beneficiary (with consequent changes to the provisions disregarding trustees’ general statutory powers of advancement)?

As a lay person, I’m surprised this question needs to be asked. But, for the avoidance of doubt, no!

Q11: Do respondents see any reason why the ‘application of income’ conditions should not be harmonised so that trustees are prevented from paying income to non-vulnerable beneficiaries during the lifetime (or relevant period) of the vulnerable beneficiary?

As for Q10!

Further comments

I am surprised that the consultation has reached this stage – where you are publishing draft legislation – without the equality impact assessment being at a more developed stage. The statutory requirement is for departments to give “due regard” to equality while making changes and the phrasing of the EQIA suggests work to examine the potential equality impacts has not yet been conducted. Presumably this is merely unfortunate phrasing of the consultation and you have already given regard to equality in putting forward these proposals for consultation? In particular I am aware from the press that there is considerable controversy over the changes to benefits which have led to these proposals – surely in order to give due regard to equality YOU would need to consider the equality impact of THESE changes and not merely rely on the EQIA published by DWP and referenced at 8.8?

Tax Impact Assessment. Again, the equality impact assessment seems nugatory, no consideration is given to any HMRC changes (such as the possibility of providing more or better assistance to affected persons and trusts in dealing with self assessment) and the consideration for monitoring and evaluation does not seem to allow for the possibility of effective *review* of any changes to see whether they are effective.



Use the mike

July 31, 2012

Yesterday I went to Sheffield station to buy some railway tickets.  My mother is deaf, so she doesn’t like to transact on the phone, and she’s in her eighties, so she’s not comfortable transacting on the internet.  So we jumped in a cab and went down to the station so she could renew her senior railcard and buy the tickets for us both to go down to London next month to see the Queen’s Diamonds.

There’s a sound system in place, so when we finally made it to the counter she set her hearing aid to the T setting and was able to hear the clerk (although she couldn’t, then, hear me, standing next to her, and had to switch back and forth).  But after she’d done the railcard transaction and we’d selected the dates and times we wanted to travel, the clerk told us the price.

“Sorry, I’m not hearing you,” I said.  The clerk gave me That Look – you know the one.  The “are you stupid or something” look.  And repeated what she’d said, at exactly the same volume.  Just move the mike, I thought – I could hear the guy at the next counter, perfectly loud and clear, because he had the mike an inch from his mouth and the volume turned up.  But this lady obviously didn’t think using the mike was necessary.  “Sorry, I still can’t hear you,” I said, and again got The Look and another repetition, this time with an eyeroll.  My mother, being of the “don’t make a fuss” generation, simply put her credit card into the machine, paid the amount we couldn’t decipher, and we checked it all later.  No big deal, right?

Well, have you ever tried to get your employer to make a reasonable adjustment to your working conditions on account of a disability covered by the Equality Act?  If the simple action of getting someone to use correctly the equipment that’s already there is a problem, imagine what it would be like trying to educate your employer on what their duties are and your reasonable requirements might be, while you were feeling ill in the first place.  I’m exaggerating?  I’ve just written and then deleted (because they aren’t my stories) a paragraph detailing three different examples I know of from my personal acquaintance of people who have had grotesque difficulties getting different employers to abide by the law in the last year; partly because, when you’re ill, you’re not really in a good place to provide a teachable moment to your employer in the first place, let alone the assertiveness to insist they comply with the law that’s in place for your protection.  It’s easier to be quiet, don’t make a fuss, make do.

Living with a disability must be hard.  Working with a disability is hard enough when you acquire the disability after you acquire the job, are a valuable source of knowledge and ability for your employer, and know and exercise your rights.

Well, what about Remploy, the business that employs workers with disabilities in an inclusive environment?  Oh, yea, being shut down.  Because, apparently, there are better ways of supporting people with disabilities in mainstream employment.

OK.  But what IS that support?  Well, if you were watching anything except the Olympics last night, you’d have seen either the Dispatches programme: Britain on the Sick or the Panorama programme, Disabled or Faking It?  Both programmes showed DWP film of people who had been prosecuted for faking disabilities but reminded us that this amounts to less than half a per cent of the people actually claiming disability allowances.  The real problem identified by both programmes was the mechanism the government has put in place to assess whether people needed to be “on the sick” or were “fit for work”.  Dispatches concentrated on ATOS and secretly filmed a GP taking the ATOS assessors’ training.  Panorama concentrated on the claimants – including the gentleman found fit for work while he was sectioned under the Mental Health Act!  Lucy Mangan spoke for me and, I believe, for millions watching, when she wrote in the Guardian:

Why don’t you just stop it,” you wanted to say. “Just stop doing this cruel, pointless, terrible thing to people. Stop adding to the sum of human misery in the world and start working for our betterment instead.”

Because it was all about finding people were capable of work – if they had one finger they could push a button, if they could sit or stand they could work a checkout, if they could theoretically propel themselves in a wheelchair they were mobile, even if they didn’t actually have a wheelchair.  And while I see the government’s argument that it’s better to think about what people can do rather than what they can’t do, none of this amounts to a hill of beans if there isn’t a job for them to move into, an employer willing to take on a one-fingered, invisible-wheelchair-using person.
One final thought.  Chris Grayling said that “there are no targets anywhere in the system“.  In other words, ATOS don’t have a fixed target of people to find fit for work (or, unfit for financial support).  This is a pusillanimous equivocation.  There may not be a “target” – find 12% of them fit for work or we sack you.  But there is an “average“: the average number of people found fit for work is 12% and if you’re outside of the average you’ll be audited.  And then look at table 1 on page 36 of the 2010 Budget Costings document which shows the expected exchequer impact of “reforming (sic) disability living allowance”.   Next year we’re taking £360 million from sick people and, the year after, £1,075 million.
Well, not in my name.  If this makes you, too, into an #angrycitizen, take a few moments to sign the epetition here.  And write to your MP.