Zac_A:
TTBOMK, as Lucy says, you can’t legally be SE in this situation if you’re driving their vehicle, this is covered in Statutory Document No5, under the section entitled “Employees”, it clearly states their O-licence could be at riskif they endorse you working in situations like this:
gov.uk/government/publicati … plications
This is really about HMRC, and I would not claim to be any kind of expert on that topic, but AFAICS the only way this would legally work is for them to pay you “through their books”.
The difference between Agency and SE is that the agency will ensure the tax and NI deductions are made. If you’re properly SE then you’ll have an accountant who should surely be able to advise on the right way to make this work.
From your link: I`ve high-lighted a few bits that may be most relevant
Employees
The First-Tier Tribunal (Tax) has considered the employment status of drivers. Her Majesty’s Revenue & Customs (‘HMRC’) raised concerns that haulage operators were wrongly treating workers as self-employed or hiring workers through their own companies in ways that did not comply with tax laws. It is now well understood that it will be rare for someone to be genuinely self-employed unless they are an owner-driver. HMRC is aware that some companies wrongly believe that anti-avoidance legislation does not apply and that HMRC cannot pursue workers, agents and their companies.
Regulation 13A of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 requires all agency workers, who sign up to an employment business after 6 April 2020, to be given a ‘Key Information Document’ which details, amongst other things, the name of the employment business. Agency workers are now also entitled to equal pay once they have satisfied the 12-week qualifying period.
You can find out if IR35 applies on GOV.UK. (see gov.uk/hmrc-internal-manual … al/esm3505)
HMRC has issued detailed guidance on employment status and has published a tool to help determine a worker’s employment status for tax purposes. Transport providers cannot claim a commercial advantage by claiming that labour-only drivers are not employees, just because they are engaged on a job-by-job basis with no guarantee of future work. The contract for each engagement may well amount to a contract of employment and that the regularity of work done may indicate that there is a continuous contract.
Here are links which apply to all drivers of commercial vehicles that carry goods, passengers or livestock:
the section in HMRC’s internal manual on employment status that covers lorry drivers generally
the section in HMRC’s internal manual on employment status that covers lorry driver leasing agreements
the section in HMRC’s internal manual on employment status that covers drivers of commercial vehicles- short-term engagements
First additional section in HMRC’s internal manual on employment status
Second additional section in HMRC’s internal manual on employment
Third additional section in HMRC’s internal manual on employment status
check employment status for tax
From 6 April 2021 many more workers came within scope of off-payroll working rules (the off-payroll working rules have been in place since 2000. They are designed to make sure that an individual who works like an employee, but through their own limited company (usually a personal service company) or other intermediary, pays broadly the same Income Tax and National Insurance contributions as other employees) (IR35) and those self-employed who work for a company as if they were an employee, may have to pay the same level of tax that permanent members of staff pay. The responsibility for working out if IR35 provisions apply will move to the organisation contracting for that individual’s services.
You can find out if IR35 applies on GOV.UK. (see gov.uk/hmrc-internal-manual … al/esm3505
The tax position is comparable to that of drivers working for taxi companies who have been found to be workers and not self-employed (Uber BV and Others v Aslam and Others [2021] UKSC 5, Autoclenz Ltd v Belcher [2011] UKSC 41 - – “the true agreement will often have to be gleaned from all the circumstances of the case, of which the written agreement is only a part”) for the purposes of the Employment Rights Act 1996 (s.230(3) sets out the two limbs where an individual is considered a ‘worker’ for the purposes of the Employment Rights Act 1996) and within the meaning of the Working Time Regulations 1998 (UKEAT/0037/18/BA Addison Lee Ltd v Mr M Lange and Others.
In finding that a courier making deliveries via the business’s mobile app, has worker status under the Employment Rights Act 1996, the Tribunal flagged the need to consider whether the individual is under an obligation to perform the services personally or whether they have an unfettered right of substitution, which has an effect on the obligation of personal performance (see UKEAT/0219/18/BA Stuart Delivery Ltd v Mr Warren Augustine). The applicable principles of personal performance were summarised into five categories by Sir Terrance Etherton MR in the Court of Appeal decision of Pimlico Plumbers (upheld on appeal to the Supreme Court) and 2018 UKSC 29:
an unfettered right to substitute another person to do the work or perform the services is inconsistent with an undertaking to do so personally;
a conditional right to substitute another person may or may not be inconsistent with personal performance depending upon the conditionality. It will depend on the precise contractual arrangements and, in particular, the nature and degree of any fetter on a right of substitution or, using different language, the extent to which the right of substitution is limited or occasional;
a right of substitution only when the contractor is unable to carry out the work will, subject to any exceptional facts, be consistent with personal performance;
a right of substitution limited only by the need to show that the substitute is as qualified as the contractor to do the work, whether or not that entails a particular procedure, will, subject to any exceptional facts, be inconsistent with personal performance;
a right to substitute only with the consent of another person who has an absolute and unqualified discretion to withhold consent will be consistent with personal performance.
The Upper Tribunal has held that the legitimacy of a driver’s employment status may be fact specific. In 2018/066 Abus Ltd, the Upper Tribunal clarified that the focus of section 81(1)(b)(ii) in the 1981 Act is not on control but on the identity of the person for whom the driver works. The Upper Tribunal has also reviewed the tax and employment position of goods drivers (see 2019/054 Bridgestep Ltd and Tom Bridge, confirmed in 2019/069 GS Couriers (Nottingham) Ltd and Others). In that case the employment clauses suggesting that the drivers had a degree of control were undermined by the reality and as described in the Driver Handbook. The Upper Tribunal raised concern that the arrangement was highly questionable, if not a sham, as the company and transport manager had abdicated their responsibilities for ensuring that the transport operation was compliant and safe, in order to save money.
The long-established test for self-employment was set out in the case of Ready Mix Concrete (see Ready Mix Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 and involves three key hurdles:
is the worker subject to a right of control? If there is no right of control of any kind, then you will not have a contract of service. However, it was also made clear in the judgment that, although a right of control is an important factor in determining employment status, it is not necessarily a determining factor;
does the service have to be provided by that individual? However, the court did indicate a limited right of delegation may not be inconsistent with a contract of service;
are the other factors present are consistent with a contract of service? Factors such as ownership of significant assets, financial risk and the opportunity to profit are not consistent with a contract of service.
In general, someone is self-employed if they are in business on their own account and bear the responsibility for the success or failure of that business. Conversely, they will be employed if they personally work under the control of their engager and do not run the risks of having a business themselves (see Statutory Guidance and Statutory Directions on Impounding).
Where a traffic commissioner encounters driver engagement, which does not appear to meet the prevailing tax requirements, they will wish to consider the impact on the level playing field within the transport industries, which underpins compliance. In the first instance they might consider allowing opportunity for the operator to ensure that relevant drivers comply with the HMRC guidance on employment. The operator might offer an undertaking and specify the date by which the operator will ensure compliance. (See Statutory Guidance and Statutory Directions on Good Repute and Fitness).