A Southampton haulier has 14 days to provide evidence that it is directly employing its drivers – or demonstrate that using self-employed drivers is legal for the activities they undertake.
West of England Traffic Commissioner, Kevin Rooney, gave Andy Transport an ultimatum after an audit report identified that its drivers were self-employed.
Last year, HM Revenue and Customs (HMRC) advised the Road Haulage Association (RHA) that it is rare in road haulage for someone to be genuinely self-employed, unless they are an owner-driver.
HMRC is aware that some haulage companies are being sold the idea that they can set up, or have an agent set up companies for their workers to avoid tax liabilities.
In February 2017, Andy Transport Limited submitted an audit to the Traffic Commissioner’s office, which noted that drivers operated under subcontracts and were not employed directly by the company. Drivers had set up their own companies and invoiced Andy Transport Limited for work undertaken.
The Office of the Traffic Commissioner subsequently wrote to the company asking it to explain how it met the requirements of HMRC’s IR35 legislation, the set of rules which affect tax and national insurance contributions for anyone who is contracted to work for a client through an intermediary.
In response, Andy Transport stated that all drivers were registered as self-employed, responsible for tax and National Insurance themselves and paid through invoice by the company.
At a public inquiry on May 4, Rooney found the firm had not sought legal advice before attending. He gave the business 14 days to either provide legal argument, addressing relevant case law and setting out how the current employment arrangements are legal, or to submit evidence that drivers are directly employed.
The Traffic Commissioner warned the company that a failure to do so would result in the operator’s licence being curtailed from three vehicles to one – as the company has only one directly employed driver. A further hearing would also be convened.
Further to the direction made by the Traffic Commissioner for the West of England at public inquiry on May 4, Andy Transport has submitted evidence to the Office of the Traffic Commissioner regarding the employment of its drivers.
Following a review of this evidence, the explanations given by the company and the assurances it has provided, the Traffic Commissioner has recorded a formal warning on the company’s licence in relation to the issues highlighted in the case.
The Traffic Commissioner also approved a variation application submitted by the operator to increase its licence authorisation to 8 vehicles 8 trailers and add a new operating centre.