HMRC demand 'could bankrupt learning disability care providers'

19 Jul 17

Enforcement action by HM Revenue & Customs threatens to bankrupt providers of learning disability care, the Royal Mencap Society charity has said.

The row has erupted over the position of care workers who sleep at their place of work as a precaution in case patients need care during the night.

Mencap said they were in practice rarely disturbed and when the national minimum wage was originally introduced the period in which these workers slept was not counted as work time, and they were instead paid a flat rate ‘on call’ allowance.

But following two Employment Tribunal decisions, the Department for Business, Energy and Industrial Strategy issued guidance that they should be paid while asleep.

The charity said HMRC was now demanding - through its powers to enforce the minimum wage - that care providers paid those concerned six years’ worth of back pay, a move that could drive some out of business. 

It called for the enforcement action to be stopped immediately pending clarification of the law.

Mencap chair Derek Lewis said: “The unintended consequences have been disastrous as HMRC have begun enforcement action demanding six years’ back pay.

“Estimates of the costs to the learning disability sector are in the region of £400m and Royal Mencap Society will be severely affected.

“For many smaller care providers across the country the financial impact will be devastating.

“We know that the Care Quality Commission is very concerned.”

Mencap chief executive Jan Tregelles said the charity did not dispute that the carers were entitled to the money but added: “We cannot pay them if we do not have the money, and we only receive money from government sources”.

A government spokesperson said: "We recognise the vital role social care providers play in supporting some of the most vulnerable people in our society and workers in that sector should be paid fairly for the important job they do. 

“The government is considering this issue extremely carefully and ministers continue to meet.”

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