Hello folks
New to the site so dont know if this subject has been covered before(apologies if it has) Set myself up as a limited company a couple of years ago on the understanding that i could work for 1 company as long as i wanted without any problems with hmrc(if only) having driven for a few customers since setting up ive been with my present customer for just over 12 months now,my problem is that the company has had the dreaded hmrc investigation and myself and the other 6 (who are soletraders) non company drivers have been flagged up as employees of the company as weve been there so long(and hmrc want tax money) and now weve either got go on the books,or look for other customers,
Are their any other 1man limited company drivers on here that have encountered this problem and how did you deal with it as getting a deffinitive answer out of hmrc just isn`t happening,any feedback would be greatly appreciated,
Cheers
You won’t get a definitive answer out of HMRC, I tried on both my and my son’s behalfs over the last year - it’s a case of them (the newly s/e helpline) ignoring the rules about bogus SE, probably to help the big agencies, unfortunately they haven’t told the rest of HMRC.
How large a company are we talking about here? Do you go through an agency or are you a direct driver? If it’s an agency what are the chances of you being swapped onto another contract for a few months, while another driver does what you’ve been doing - it’s the only way I was told that it would work.
I would presume your working direct rather than through agency else the agency would be getting grief of HMRC. If you don’t want to lose the contract with the company go on the books with them or make sure your doing other work as well. I know the agencies seem to get round it with some Swedish Derogation loop-hole or something. It’s been around in the building trade for years with subbies and working for one company for too long, they used to get round it by having each house as a seperate contract. Don’t know if you can have a set contact for so many loads etc. and then have a new contract after that.
Your not an owner driver so that doesn’t make sub contracting for one firm look any different to being directly employed as far as HMRC are concerned. It’s a form of tax evasion really by both parties as HMRC look at it, if you were an MP you’d be in jail by now 
Foxstein:
…, if you were an MP you’d be in jail by now
Hmmm, highly unlikely, haven’t they found a load of Civil Servants and BBC employees doing the same thing. With the AWR rules I wouldn’t be surprised if HMRC is going to be forced into looking more closely at sham S/E.
HMRC will never give you a definite general answer, but in a lot of cases it’s pretty easy to tell - if you’re turning up at a time the boss specifies, driving his truck, working almost entirely for him (in other words exactly like one of his employed drivers), then you’re going to struggle to win an IR35 dispute.
Here’s some guidance: hmrc.gov.uk/employment-status/index.htm#1
wilbur:
HMRC will never give you a definite general answer, but in a lot of cases it’s pretty easy to tell - if you’re turning up at a time the boss specifies, driving his truck, working almost entirely for him (in other words exactly like one of his employed drivers), then you’re going to struggle to win an IR35 dispute.Here’s some guidance: hmrc.gov.uk/employment-status/index.htm#1
That’s the whole point. You look at 90% of agency drivers that have gone S/E, especially since the AWR rules came in, and none of them are self-employed according to the guidance, yet that is the only way that agency drivers can now get work through the majority of agencies, and HMRC are currently turning a blind eye to it. When the economy starts picking up then you can bet your bottom dollar that HMRC will then be told to start targetting agency workers in the same way that builders & IT consultants were hit before the recession, and we all know who will come off worst.
"in this world, nothing is certain except death and taxes.”
Benjamin Franklin 1789
pootle71:
Hello folks
New to the site so don`t know if this subject has been covered before(apologies if it has)
Set myself up as a limited company a couple of years ago on the understanding that i could work for 1 company as long as i wanted without any problems with hmrc
Thats total bollox. You can’t do that at all.
You’re screwed. HMRC are right. You were in a position that classed as employed. The old Ltd Company trick doesn’t work as you were in breach of IR35 because (from the HMRC website):
the circumstances are such that, if you had provided the services directly to the client under a contract between you and the client, you would have been regarded for income tax purposes as an employee of the client and/or, for NICs purposes, as employed in employed earner’s employment by the client.
And the reason you would have been regarded for income tax purposes as an employee if you were providing services directly are you would have answered yes to one or more of the following meaning it met an employed position:
Do they have to do the work themselves?
Can someone tell them at any time what to do, where to carry out the work or when and how to do it?
Can they work a set amount of hours?
Can someone move them from task to task?
Are they paid by the hour, week, or month?
Can they get overtime pay or bonus payment?
And you would have answered no to pretty much all of the following meaning you didn’t meet the requirements for self employment:
Can they hire someone to do the work or engage helpers at their own expense?
Do they risk their own money?
Do they provide the main items of equipment they need to do their job, not just the small tools that many employees provide for themselves?
Do they agree to do a job for a fixed price regardless of how long the job may take?
Can they decide what work to do, how and when to do the work and where to provide the services?
Do they regularly work for a number of different people?
Do they have to correct unsatisfactory work in their own time and at their own expense?
Expect a tax bill soon for all the expenses you’ve claimed.
in a way its about time they stopped agencies especially doing this as they really cream it in from ltd company drivers and to be honest the drivers dont gain a huge amount from it!