THE idea of disabled and seriously ill people being able to control the care they receive is sound in principle. Anyone with serious care needs should be able to make informed choices about their daily lives, the ultimate aim being to allow people to lead independent lives based on their own decisions. But what is self-directed support, as it is called, like in reality? Is it really empowering people or just adding to the pressure?

The case of Dugald McArthur, reported in The Herald today, clearly illustrates some of the problems. Mr McArthur was 26 years old when he seriously injured his spinal cord while playing rugby and he now needs full-time care from up to five personal assistants. On top of that, the introduction of self-directed support means he is now also responsible for paying the salary, pensions and sick pay of his carers. Mr McArthur was a seriously disabled man, but suddenly he finds that he is effectively an employer too.

Like many others who find themselves in this situation, Mr McArthur sought help and found it at Lothian Centre for Inclusive Living (LCIL), which, for a fee, handled payroll on his behalf. The problem now is that centres like LCIL have been told by HMRC they are liable for VAT, which would add 20 per cent to the bill for payroll services. That leaves LCIL and others like it with a choice: try to absorb the costs or pass them on to the client. Either way, it has serious consequences for vulnerable people and, considering how tight budgets already are, might even lead to the closure of some of the centres.

HMRC itself does not emerge well from the situation. For years, they told centres such as LCIL that they were exempt from VAT but since 2010 they have taken a different position, asserting that payroll services are not directly connected to the provision of care and are therefore subject to tax. But not only is that inconsistent with HMRC’s previous position, it creates the rather farcical situation in which money goes from government to local authorities and then back to government in a loop. There has to be a more efficient and fairer way of doing things.

The potential consequences for the individuals involved are also troubling. Seriously disabled people such as Mr McArthur are among the most vulnerable in society and yet HMRC’s insistence that it must charge VAT on payroll means that the budgets to pay for their care will be squeezed even more. One of the problems with the self-support policy is that many councils appear to have used it as a chance to cut the support that people receive, and charging VAT on payroll will only make the situation worse.

Who is likely to win the battle over VAT on the long term is still unclear – there will be a test cast later in the year – but there is still time for HMRC to think again. The case also highlights a bigger question about how we care for the ill and vulnerable. There are arguments to be had about disabled people making their own decisions about their care – there may even be arguments to be had about whether some services should be taxed. But whatever happens on the question of VAT, the services for the seriously ill have to be properly funded – and at the moment, they are clearly failing that important test.