Consider your driver’s employment status carefully as HMRC are investigating!
.As any business utilising goods vehicles will know, you will have to handle a number of overlapping regulatory regimes; these will probably at least include maintenance, insurance, Operator Licencing and legalities for drivers.
Traditionally, drivers have enjoyed full employment status, dealing with an employee’s income tax, National Insurance contributions, holiday pay, sick pay and pension contributions. However, as budgets tightened, many companies have looked for ways to cut costs, and so over the last decade it became more common to see drivers holding a self-employed status. It is naturally a much cheaper option for an employer, but HMRC and the Office of Traffic Commissioner are looking to bring this practice to an end, unless it is legitimately the case.
HMRC has been undertaking investigations into this practice and appear to be looking to claw back underpayment of taxes which may result.
According to HMRC it is very rare that a driver is genuinely self-employed. You would expect, as a minimum, that:
- the driver would own their open vehicle;
- the driver is responsible for all tax, insurance, maintenance, fuel costs;
- the driver has autonomy in respect of whether to undertake the work on any given day; and
- the driver can substitute themselves for another equally suitably qualified driver.
For Operators relying on a Goods Vehicle Operator’s Licence, not only could a HMRC investigation be an expensive experience, it is likely to result in a call to Public Inquiry where the Traffic Commissioner can ultimately revoke your entitlement to operate these vehicles.
If you would like advice on haulage, supply or logistics please contact the writer and our expert, Simon Beasley in our Dispute Resolution team on 0207 288 4769 or email firstname.lastname@example.org. If you would like to discuss the employment status for your drivers please contact Neil Johnston