Hi all, I thought that this article which I found in truck and driver, may be of interest to drivers who are considering becoming ltd company drivers / Self-employed workers.
''There is widespread misunderstanding across the industry that it is acceptable to engage a driver on a self-employed basis. This may be short term cover to fill a staff shortage or on a long term basis. Sadly, unless the driver holds an operating licence and is carrying on their own haulage business they cannot be considered self-employed. I would emphasise that this is not a recent change in HMRC’s approach; it is the department’s longstanding view.
Historically, drivers have been provided by agencies and supplied to the haulage business on a temporary basis and it was not uncommon for the agencies to engage those drivers on a self-employed basis. Since the introduction of the intermediary tax rules in April 2014 (ITEPA 2003, these workers have fallen within the PAYE and National Insurance net if they are working under ‘supervision, direction or control’. The supervision, direction or control may be exercised by the agency, the end client or, indeed, anyone within the relationship. In reality, given the nature of the work undertaken by a driver, it is extremely unlikely that they will be able to win any argument with HMRC that they are not under direction, supervision or control. This is because the operator engaging the worker is likely to be telling them when they are needed to work and the duties they are required to perform. The intermediary rules require the agency to operate PAYE and National Insurance on the payments they make to the worker. This is the case unless the agency is situated outside the UK when responsibility sits with the end client (the haulage company) which should be operating PAYE and National Insurance on the payments it makes to the agency.
Getting the tax position wrong can prove expensive. There is considerable confusion over HMRC’s approach when things go awry and its approach changed following the ruling in Demibourne Limited v HMRC [2005] SSCD 667. Now, any potential loss of income tax is the liability of the engager, together with National Insurance, interest and penalties. The penalties are based on the total PAYE and National Insurance (before any Demibourne offset). Errors here could cause a significant amount of worry for many businesses. Depending on their size, haulage companies must consider the potential impact with their senior accounting officer responsibilities.
As well as the employment tax costs there are employment law implications which could give rise to a significant liability if it is found that the worker should have been treated as an ‘employed worker’. Recent years have seen a significant number of employment tribunal cases in this regard.
I wonder why the HMRC dont just contact the the national agencies direct and put them straight on this. After all theres only a handful of nationwide agencies and if they corrected them it would surely put the job right.
I have been in debate with a driver on a Facebook forum about Curries offering £110 per shift self employed. He says that amounts to £550 per week, not bad for class 2. I have said that its poor because there is no holiday pay and you do your own book keeping as well as tax and Nat. Ins. How can you be self employed and only have one client?
HMRC cannot interpret the law, the law is the law, set by parliament, it cannot have differing methods in different parts of the country. it is one law for all, so if there are discrepancies in HMRC views of self employment, an employment lawyer will have a field day.
ripperman:
HMRC cannot interpret the law, the law is the law, set by parliament, it cannot have differing methods in different parts of the country. it is one law for all, so if there are discrepancies in HMRC views of self employment, an employment lawyer will have a field day.
Do you honestly think the HMRC could loose a case in court ■■?
ripperman:
HMRC cannot interpret the law, the law is the law, set by parliament, it cannot have differing methods in different parts of the country. it is one law for all, so if there are discrepancies in HMRC views of self employment, an employment lawyer will have a field day.
Do you honestly think the HMRC could loose a case in court ■■?
It’s a tricky one. Which way will Her Majesty’s Court and Tribunal Service decide, in a case involving Her Majesty’s Revenue and Customs?
ripperman:
HMRC cannot interpret the law, the law is the law, set by parliament, it cannot have differing methods in different parts of the country. it is one law for all, so if there are discrepancies in HMRC views of self employment, an employment lawyer will have a field day.
Do you honestly think the HMRC could loose a case in court ■■?
As my accountant once said when we were embroiled in a battle, it’s their pitch, their ball and they’ve got a lot more players.
alamcculloch:
I have been in debate with a driver on a Facebook forum about Curries offering £110 per shift self employed. He says that amounts to £550 per week, not bad for class 2. I have said that its poor because there is no holiday pay and you do your own book keeping as well as tax and Nat. Ins. How can you be self employed and only have one client?
No pension, no sick pay and no surety of employment. On a PAYE job you should get 8 hours wether there is work or not.
HMRC from my experiences are not money grabbing idiots trying to squeeze the last penny from you. They are there to do a job.
Having said that maybe they`ll let me off a bit in the future? Maybe not.
Look. gov.uk/working-for-yourself
Click through, or phone them, they will tell you whether or not you are genuinely self employed. It`s free. No accountants with their own axe to grind. No employer trying to evade their responsibility to you as an employee.
EDIT. But they are still humans, try taking the mickey, and as said, their sense of humour will fail.
We’ve all “debated” this before right few times on TN.
Those members running as Sole Trader SE or “one man band” Ltd company drivers WILL in forthcoming yrs be cracked open by a rather LARGE sledgehammer by HMRC.
I don’t think it will make one “ball of blue” difference if they work for a single client or half a dozen to be honest.
It’s tax avoidance/“disguised employment” on a large scale no matter what!!!
I among others have pointed this out on bakebook forums only to be ridiculed.
Franglais:
HMRC from my experiences are not money grabbing idiots trying to squeeze the last penny from you. They are there to do a job.
Having said that maybe they`ll let me off a bit in the future? Maybe not.
Look. gov.uk/working-for-yourself
Click through, or phone them, they will tell you whether or not you are genuinely self employed. It`s free. No accountants with their own axe to grind. No employer trying to evade their responsibility to you as an employee.
EDIT. But they are still humans, try taking the mickey, and as said, their sense of humour will fail.
I’m going to have to disagree on the money grabbing idiots bit.
We went through 2.5 years of HMRC investigation, whilst they tried to claim that we did work for cash. We don’t, I moved a sideboard down the country for an ex driver for I think, £30.00 cash It’s hardly big on the evasion scale.
It got ridiculous, ended up with them desperate to trip us up. Look at the time sheet, it says slough and you haven’t invoiced anything for Slough. No, but I’ve invoiced something for Colnbrook on the same day… If it hadn’t been that it was so time consuming, it would have been funny. Outcome, they owed us £863.00 on some obscure accounting technicality that went over my head.
Franglais:
HMRC from my experiences are not money grabbing idiots trying to squeeze the last penny from you. They are there to do a job.
Having said that maybe they`ll let me off a bit in the future? Maybe not.
Look. gov.uk/working-for-yourself
Click through, or phone them, they will tell you whether or not you are genuinely self employed. It`s free. No accountants with their own axe to grind. No employer trying to evade their responsibility to you as an employee.
EDIT. But they are still humans, try taking the mickey, and as said, their sense of humour will fail.
I’m going to have to disagree on the money grabbing idiots bit.
We went through 2.5 years of HMRC investigation, whilst they tried to claim that we did work for cash. We don’t, I moved a sideboard down the country for an ex driver for I think, £30.00 cash It’s hardly big on the evasion scale.
It got ridiculous, ended up with them desperate to trip us up. Look at the time sheet, it says slough and you haven’t invoiced anything for Slough. No, but I’ve invoiced something for Colnbrook on the same day… If it hadn’t been that it was so time consuming, it would have been funny. Outcome, they owed us £863.00 on some obscure accounting technicality that went over my head.
Idiots.
We speak as we find.
My personal experience has been when I tried to get a rebate: I phoned with my query, got an appointment, and went to see them. 20 minutes and that was it, cheque in the post.
Do you think its possible my experience has resulted in a rosy tint to my perception? Is it at all possible Im less then 100% objective following a lump of money ending up in my bank?
Doubtless there are idiots there, as anywhere. More or less than elsewhere? Dunno.
But wouldnt you agree that their purpose is to administer the laws set by parliament? They arent, as individuals, after screwing us for all they can get? (Normally)
Franglais:
HMRC from my experiences are not money grabbing idiots trying to squeeze the last penny from you. They are there to do a job.
Having said that maybe they`ll let me off a bit in the future? Maybe not.
Look. gov.uk/working-for-yourself
Click through, or phone them, they will tell you whether or not you are genuinely self employed. It`s free. No accountants with their own axe to grind. No employer trying to evade their responsibility to you as an employee.
EDIT. But they are still humans, try taking the mickey, and as said, their sense of humour will fail.
I’m going to have to disagree on the money grabbing idiots bit.
We went through 2.5 years of HMRC investigation, whilst they tried to claim that we did work for cash. We don’t, I moved a sideboard down the country for an ex driver for I think, £30.00 cash It’s hardly big on the evasion scale.
It got ridiculous, ended up with them desperate to trip us up. Look at the time sheet, it says slough and you haven’t invoiced anything for Slough. No, but I’ve invoiced something for Colnbrook on the same day… If it hadn’t been that it was so time consuming, it would have been funny. Outcome, they owed us £863.00 on some obscure accounting technicality that went over my head.
Idiots.
We speak as we find.
My personal experience has been when I tried to get a rebate: I phoned with my query, got an appointment, and went to see them. 20 minutes and that was it, cheque in the post.
Do you think its possible my experience has resulted in a rosy tint to my perception? Is it at all possible Im less then 100% objective following a lump of money ending up in my bank?
Doubtless there are idiots there, as anywhere. More or less than elsewhere? Dunno.
But wouldnt you agree that their purpose is to administer the laws set by parliament? They arent, as individuals, after screwing us for all they can get? (Normally)
We agree on that last bit. At the time of my investigation, they were targetting small haulage companies, they’d had some successes, so obviously we were all at it . An investigation of that duration costs literally thousands to defend.
Franglais:
Doubtless there are idiots there, as anywhere. More or less than elsewhere? Dunno.
But wouldnt you agree that their purpose is to administer the laws set by parliament? They arent, as individuals, after screwing us for all they can get? (Normally)
We agree on that last bit. At the time of my investigation, they were targetting small haulage companies, they’d had some successes, so obviously we were all at it . An investigation of that duration costs literally thousands to defend.
It is unjust that proving your innocence cost money and aggravation. And although you knew your innocence it must be a worry being under the spotlight.
Far from a happy experience.
I have always believed that there is no such thing as self employed unless owning an O licence…many have disagreed with me…but i also believe that who ever employs you, should be responsible for your tax and employment, IE…agencies…well they dont want to do it anyway…so they pass it over either to another firm to do it on their behalf, or as a part of their own structure ( who knows ) but this is Umbrella…and the driver is responsible for paying the fees…Agencies should be held acountable by HMRC…and btw, i wonder how many drivers can claim back these fees they have paid out ■■..or actually do. The way i see it, is if an umbrella company does your accounts as it were, surely they themselves are treating it as on a self employed basis. what do you think.?
