IR35 Confusion, Please help

UK PROFESSIONAL DRIVERS FORUMS THE UK PROFESSIONAL DRIVERS FORUM (INTERACTIVE)
1

As some of you may know I am a coach driver working on a self employed or freelance basis (whatever the correct term is at the moment)

I have recently been sent an email containing an article written by someone who operates a coach driving agency.
In this article he says that basically I, or anyone else to that matter, cannot be a self employed coach driver.

Here is the article justcoachdrivers.com/pdf/CBWSE.pdf

Most of it seems to just be hot air and guff.

IF what he says is true COULD this also apply to self employed HGV drivers working self employed for agencies? A lot of the criteria look to be the same.

For example:

Place and time of work
If the driver is being told by
the operator where to be and what
time to be there to start a job, and
what to do during the job, i.e. a
route and itinerary, then this points
towards employment. If the driver
can choose when to start and how
to do the job, this points towards
self-employment.

Surely this would mean there are very few if ANY self employed people who do things for other people.

A coach driver needs to take the passengers to where they have paid to go.
A truck driver needs to take the goods to where they have been ordered.
A brick layer needs to build the wall where it is required.
A cleaner needs to clean the bits that need cleaning.
I could go on, but having an itinerary is no different from any other trade, it is simply doing what is required and has been agreed.

The result of all of this looks worrying. He is moving his self employed drivers to PAYE and so they will probably be on less money, takehome.

With the many tens of HGV agencies using self employed people I need to ask the question, HOW are they doing it and satisfying the HMRC?

I have a vested interest in getting the correct answer, I have spent many months gaining work from companies and IF I have to go onto PAYE for all of them it will well and truly pee me off.

I hope my ramblings make sense and I await any helpful responses.

2

Check out IR35 on the HMRC/Directgov website.

3

Ir35.

Allt of companies. O longer like self employed because of ir35
Only way round this is ltd company as takes the onus away from the operater and on the self employed ltd company

If your working for several companies then you are ok for ir35
But not if working reguler for just one or two companies

Ltd company the only way round at present
Accordig to accountant i apoke to

4

mucker85:
As some of you may know I am a coach driver working on a self employed or freelance basis (whatever the correct term is at the moment)

I have recently been sent an email containing an article written by someone who operates a coach driving agency.
In this article he says that basically I, or anyone else to that matter, cannot be a self employed coach driver.

Here is the article justcoachdrivers.com/pdf/CBWSE.pdf

Most of it seems to just be hot air and guff.

IF what he says is true COULD this also apply to self employed HGV drivers working self employed for agencies? A lot of the criteria look to be the same.

For example:

Place and time of work
If the driver is being told by
the operator where to be and what
time to be there to start a job, and
what to do during the job, i.e. a
route and itinerary, then this points
towards employment. If the driver
can choose when to start and how
to do the job, this points towards
self-employment.

Surely this would mean there are very few if ANY self employed people who do things for other people.

A coach driver needs to take the passengers to where they have paid to go.
A truck driver needs to take the goods to where they have been ordered.
A brick layer needs to build the wall where it is required.
A cleaner needs to clean the bits that need cleaning.
I could go on, but having an itinerary is no different from any other trade, it is simply doing what is required and has been agreed.

The result of all of this looks worrying. He is moving his self employed drivers to PAYE and so they will probably be on less money, takehome.

With the many tens of HGV agencies using self employed people I need to ask the question, HOW are they doing it and satisfying the HMRC?

I have a vested interest in getting the correct answer, I have spent many months gaining work from companies and IF I have to go onto PAYE for all of them it will well and truly pee me off.

I hope my ramblings make sense and I await any helpful responses.

will try and help you on this, i,ve been self employed for 5 yrs mainly working for a large uk company.

the criteria i had to overcome to stay self employed was.
1, they did not supply me with any tools or uniform to do the job.
2,i was not at their controle to start or be somewhere at a given time.
3,i could supply another individual to cover my work.
4, i had to work for more than 1 company.

hope this helps you.

5

Thanks browncow. I meet all of those same criteria that you have mentioned.

What I’m really trying to find out is why one agency is going to all PAYE when most if not all other agencies are keen for you to be S/E. this is advantagious for both work provider and worker.

I know that in his previous dealings with HMRC he has owed them A LOT of money, are they just being extra vigilant and paying him extra attention because of his previous actions?

6

dont think any agency will take you on unless you are a limmites company.

7

According to my accountant wife, it’s essential that you work for more than one business.

8

Socketset:
According to my accountant wife, it’s essential that you work for more than one business.

+1, or set up a Ltd Co.

9

Hexhome:

Socketset:
According to my accountant wife, it’s essential that you work for more than one business.

+1, or set up a Ltd Co.

From what I have been reading setting up as a limited co and then only working for 1 company is a BIG NO NO. I should be ok as I have a handful of clients to pick and choose from.

10

mucker85:
What I’m really trying to find out is why one agency is going to all PAYE when most if not all other agencies are keen for you to be S/E. this is advantagious for both work provider and worker.

They’re pre-empting the coming ■■■■■■■■■■ Guarantee there WILL be a witch hunt.

11

Conor:

mucker85:
What I’m really trying to find out is why one agency is going to all PAYE when most if not all other agencies are keen for you to be S/E. this is advantagious for both work provider and worker.

They’re pre-empting the coming [zb]. Guarantee there WILL be a witch hunt.

any more information to this cryptic foretelling oh wise on?

12

I should be ok as I have a handful of clients to pick and choose from.
[/quote]
That’s very good to have because I have seen too many people been brought down by one firm going under or no longer needing them for whatever reason.

Having a selection of clients is a good safety net.

Also it’s a lot less complicated if you can avoid being VAT registered ie keep your turnover below around 70k a year.

13

mucker85:

Hexhome:

Socketset:
According to my accountant wife, it’s essential that you work for more than one business.

+1, or set up a Ltd Co.

From what I have been reading setting up as a limited co and then only working for 1 company is a BIG NO NO. I should be ok as I have a handful of clients to pick and choose from.

When you work for 1 company, ie a PSC, as long as you prove the distinction between employee and employer within your criteria then no probs.

Remember an Accountant is not HMRC.

14

Jazzer:
When you work for 1 company, ie a PSC, as long as you prove the distinction between employee and employer within your criteria then no probs.

A Ltd Co. (or even a sole trader) cannot be an employee - that’s where the issue lies.

15

it dosn’t matter if you’re self employed or have a limited company. if you are working as an employee in the eyes of HMRC, then your limited company could be disolved, you could be banned from being a company director for a few years, the company that employed you as self employed or Ltd will be liable for all your tax and Ni liabilities.
this is nothing new, HMRC have simply been a bit relaxed about it in recent years.

16

mucker85:

Conor:

mucker85:
What I’m really trying to find out is why one agency is going to all PAYE when most if not all other agencies are keen for you to be S/E. this is advantagious for both work provider and worker.

They’re pre-empting the coming [zb]. Guarantee there WILL be a witch hunt.

any more information to this cryptic foretelling oh wise on?

He knows his onions, he is basically telling anybody who will listen, that our great friends HMRC will be taking a look at our industry, and, the s/e, Ltd, + umbrella mobs are on the radar.

Makesure you are sqeaky clean, and, your accountant is upto the job when the blood hounds start sniffing :open_mouth:

17

Socketset:
I should be ok as I have a handful of clients to pick and choose from.

That’s very good to have because I have seen too many people been brought down by one firm going under or no longer needing them for whatever reason.

Having a selection of clients is a good safety net.

Also it’s a lot less complicated if you can avoid being VAT registered ie keep your turnover below around 70k a year.
[/quote]
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You are missing a trick with the VAT chap, have a look at the “flat rate scheme”, money for old rope, dead easy to administer, AND, it keeps HMRC off the scent [so i`m told, by my accountants], as you are an unpaid tax collector, and they need us :wink:

I say “unpaid”, this is`nt totally true, they let you keep half, for being a good boy :smiley:

18

Jazzer:
When you work for 1 company, ie a PSC, as long as you prove the distinction between employee and employer within your criteria then no probs.

If as a driver you work for just one firm through a limited company of which you are the only employee (i.e. a personal service company) then the company is, in law, subject to IR35 regulations which effectively means you pay tax on all the income as though you were working direct for the haulier as an employee.

Even if you have more than one customer it is a bit of a grey area unless you can meet most/all of HMRC’s list of requirements for being self employed. One of the most common ones they would get you on is the “substitution clause” which basically says “If you are unable to do the job are you allowed to send someone else in to do it for you. If not you are probably employed and not self employed.” Now I don’t know about everyone else’s clients but most of mine would be pretty miffed if they were expecting me to turn up one morning and I had sent someone else they had never met instead… Thankfully in my case my wife also drives and we have in the past covered each other’s work so if we did get investigated we should be OK.

Another one is the “if you provide tools for the job you’re probably self employed, if not you’re probably employed” rule. Some interpret this to mean “if you’re not providing the truck you’re not self employed”, others (me included) argue that if the contract is to “drive this truck” then supplying the tools for the job translates to hi-vis, safety boots, gloves, etc.

It’s a minefield, and as Conor and others have said, it’s quite possible that HMRC will be clamping down on it all quite soon.

Paul

19

mucker85:

Hexhome:

Socketset:
According to my accountant wife, it’s essential that you work for more than one business.

+1, or set up a Ltd Co.

From what I have been reading setting up as a limited co and then only working for 1 company is a BIG NO NO. I should be ok as I have a handful of clients to pick and choose from.

I do about 97% for one very good company, 2% for another, and, I have a 1% flurry towards the end of the tax year, just to show “more” customers, this does the trick for me. :wink:

20

mucker85:

Conor:
They’re pre-empting the coming [zb]. Guarantee there WILL be a witch hunt.

any more information to this cryptic foretelling oh wise on?

I was around for the IT sector one. Everything has been unfolding exactly the same. Companies realised they could save money getting the IT guys to be self employed “sub contractors” whilst technically being employees, the use of umbrella companies, all of it.

The govt over the last couple of years have also given HMRC more money for tax investigations.

And this from Contractor Weekly in the July 2012 newsletter :

“In response HMRC has now announced that it will increase its investigations into PSC’s. After admitting that HMRC had only enquired into 23 PSC’s, the department’s chief, Lin Homer, vowed to increase such investigations ‘ten-fold’ over the next year.”

For those of us who have seen it before, the current chess board is looking awfully familiar. All the pieces are in the right places but this time with the added sugaring of a double dip recession and public outrage at tax evasion.