‘Arcane’ tax rules silence vulnerable groups, says new research

People living in challenging circumstances are not able to have their say on services affecting them due to ‘arcane’ tax rules, new research has found.

Many organisations such as charities, local government and universities work with people with lived experience of issues such as poverty and homelessness to shape and improve their services.

The National Institute for Health Research (NIHR) advises that the best practice is for participants to be paid for their expertise – and the Government often mandates this to be the case, for example in the accreditation of university courses.

However, research by the Austerity Action Group – which is funded by the Social Workers Union – found that over a third (35%) of people giving their advice and expertise through research and involvement opportunities said they accepted a reduced rate of payment for their time or only took expenses due to worries that remuneration for their expertise would affect their benefits or tax.

In more than a fifth (22%) of cases there was no payment made at all, which was more likely to affect those with a long-term health condition, disability, people of colour and other marginalised groups.

“Using lived experience is not cost free, either emotionally or physically,” one service user said, responding to the survey. “If I am making a contribution to a project I expect to be paid, just like all the other professionals or consultants around the table. There also needs to be payment for preparation, it is not easy just to rock up and share some very traumatic and discriminatory experiences about services.”

Another respondent explained the impact of poor remuneration practices: “I have previously had to declare my earnings from such involvement, which then affected our family income, and my mental health because of the stress of worrying about whether and how much my benefits would be affected. My disabled daughter had similar issues, and we had to go through the process of getting her earnings recognised as therapeutic earnings, which I had to organise on her behalf.”

“I give a considerable amount of unpaid time to training healthcare professionals, trainee nurses, social workers, physios and dieticians,” one respondent explained, adding: “It takes a lot of time, particularly the preparation as I want to do a good job. I don’t claim because of the system of sending forms which I can’t access because I do it on my phone and I don’t have a printer.”

The research comes as a broad range of charities, campaigners and individuals have written to Rt Hon. Lucy Frazer QC MP, the new Financial Secretary to the Treasury, to ask for the Government to make two changes to tax rules to ensure that participating in research and involvement opportunities is exempt from tax.

Campaigners have also called for clarity that this earnings exemption also applies to income assessed for benefits thresholds.

Angi Naylor, a social worker and part of the Austerity Action Group, said the sector relies on people with lived experience of issues to contribute to research and service development.

“[Research] is a key way that we can create new services or policy recommendations. But tax and benefit rules mean that these people aren’t being rewarded for their time and expertise - these people are experts through lived experience and should be treated as such.”

Dr Peter Unwin, senior lecturer in social work at the University of Worcester, said: “At the heart of the development of many university courses are the views and experiences of people who our graduates will go on to work with. It is essential that their voices are heard and that they are fairly remunerated for their expertise.”

“This research reveals why we are calling on the Government to make minor changes to tax and benefit rules to ensure anyone participating in research and involvement opportunities should be able to accept full payment for the expertise they bring to charitable and public organisations.”

John McGowan, General Secretary of the Social Workers Union (SWU), said there have always been complex difficulties for organisations to pay people with lived experiences for their time and expenses and who take part in co-production or participation activities without them losing out on their entitlement to benefits.

“The research highlights this and further interventions are required so not to penalise the very people who are needed to shape services and offer advice and participation.”