Self employed vs employed driver

UK PROFESSIONAL DRIVERS FORUMS OWNER AND FLEET OPERATORS FORUM (INTERACTIVE)
1

Some advice please from those in the know would be very helpful…

I am currently an owner driver but I am soon going to be taking delivery of an additional truck. I have been in talks with the driver I want to take on as I know him and he comes highly recommended. I had planned on using a payroll company to sort out his PAYE and NI contributions. He has since said that he wants to be self employed and will give an invoice at the end of each week.

Is it acceptable to have a single driver working for me full time on a self employed basis? If it is allowed are there any obligations that I must fulfil or is the onus on him to do his own tax returns and I will not have to worry about anything?

Thanks

2

It’s highly likely that HMRC would look on this as “disguised employment”.

Basically, there are two tests to pass for somebody to be genuinely self employed. Do they bring anything substantial to the job apart from their labour? And are they able to lose money on a job? For a typical lorry driver working for somebody else, they wouldn’t pass either of these tests.

3

no becomes classed as employed if working solely for you full time or so ive been told

4

lee mat:
no becomes classed as employed if working solely for you full time or so ive been told

isnt it ok though as long as he “makes himself available” to work for other people, even if he never does

if you are right though on that basis an owner driver solely working for one customer couldnt be self employed ?

5

For tax purposes put him no a monthly or short term contract ie 3 months. This will sort out

It’s highly unlikely that hmrc will look at it as long as he pays his tax he’ll need to set up as a ltd company though.

Dispite what is put on here the are many drivers who do this and only work for one company

6

Harry Monk:
It’s highly likely that HMRC would look on this as “disguised employment”.

Basically, there are two tests to pass for somebody to be genuinely self employed. Do they bring anything substantial to the job apart from their labour? And are they able to lose money on a job? For a typical lorry driver working for somebody else, they wouldn’t pass either of these tests.

Sorry being pedantic:

The increasing tendency to see clauses in employment contracts which require drivers to pay towards damage to an employer’s vehicle must meet this condition.

7

if he doesnt pay his tax or NI you will be responsible for paying it

8

Thanks for the replies.

9

A good friend of mine lost his fleet of coaches when HMRC decided he was liable for all the back tax and NI on several drivers over some years.

Pete :laughing: :laughing:

10

If I were in your boots I’d be asking my accountants advice on this one.

BB

11

You can take him as a ltd company driver and is not your responsibility to pay his taxes as you pay him VAT as will be strictly business relationship between you and him, not employment.

12

Julian78:
You can take him as a ltd company driver and is not your responsibility to pay his taxes as you pay him VAT as will be strictly business relationship between you and him, not employment.

Yes, this is completely true, if the driver is Limited Company then your responsibility ends when you pay his invoice.

I don’t think a Limited Company driver would be registered for VAT though? I thought the threshold was about £70,000?

13

Harry Monk:

Julian78:
You can take him as a ltd company driver and is not your responsibility to pay his taxes as you pay him VAT as will be strictly business relationship between you and him, not employment.

Yes, this is completely true, if the driver is Limited Company then your responsibility ends when you pay his invoice.

I don’t think a Limited Company driver would be registered for VAT though? I thought the threshold was about £70,000?

You can register for VAT regardless of turnover. A lot of Limited company drivers register for the flat rate VAT scheme as it is more profitable to do so. Basically they charge VAT but so not claim it.

14

How about…
buy the 2nd truck and Rent it to your “driver” and let him find his own work/pool work? (both invoice customer separately for work undertaken).

15

The driver has a ‘UTR’ number meaning that he has registered for self assessment. I am due to see my accountant in a few weeks time. Until then I will pay the drivers invoices and take advice when I see him.

16

I’m with the limited company scenario. All be it in another trade, but I am better off for it and clients and customers prefer this slightly more flexible arrangement. I will be setting up my limited company soon after passing my tests :slight_smile:

Self employed? got to be careful that you don’t fail IR35, although HRMC investigations are less these days.

Sign onto the flat rate VAT scheme; you charge 20% pay HMRC 10% and you keep 10% :slight_smile:

17

Just find yourself a good lad and take him on PAYE no messin then with unpaid tax etc

18

He’s only got to do one day a year for someone else & he can be classed as self employed as he’s free to work for more than your company.

To be totally bullet proof just tell him to go ltd & then it don’t matter.

The first scenario is above board although you’d need to check he did actually get paid by someone else.

19

SHYTOT:
Just find yourself a good lad and take him on PAYE no messin then with unpaid tax etc

The inland revenue tax people are a total pain to deal with.

If you over pay then good luck getting it back.