Is this correct? (self employed status)

I have just been speaking with a driver who works for a large well know locally based transport company who have a contract with another locally based company to deliver solely their items (very large volume)

He uses the transport companies van, fuel and benefits from all other associated expenses in relation to the van (ie he doesnt rent it from them and the van costs him nothing) in return his hours are 9am-7pm, and he get £70 a day Gross on a self employed basis.

Is this allowed by HRMC

As I understand it, if you are only supplying services to one company, in the eyes of the HRM&C you are not self employed. This is just a ploy by the "employer" to evade compliance with employment law.

Same would apply if it was his own van and expenses.

The fact that he is in their van surely makes the violation clearer does it not?

Well no not really, you can use the services of a self employed temp in your office that uses your equipment but you don't employ them. I think the criteria is the fact that you must work for more than one client to be classed as self employed.

I THINK you may be able to get away with it if you say you are a Sub-Contractor. Just like builders etc etc

TNT had this problem back in 1999 There was supposed to be an HMRC investigation but it never happened. Then it was TNT Logo on van £500 + vat, cost paid by subby TNT uniform £100 + vat cost paid by subby.. Set bank run hours. You had to book holidays and days off. You had a manager to answer to. And you weren't allowed to contract to anyone else

Because you had to give them an invoice you were self employed...,.,.,.,.,.,.,.,,,,.,. But not really though!

Deadline Despatch said:

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I THINK you may be able to get away with it if you say you are a Sub-Contractor. Just like builders etc etc

but if you are a subcontractor in the building trade you have to supply tax reference details and are taxed at source to the tune of 20% ie:you cannot just invoice as we do

A grey area that this industry has been taking advantage of for decades

I think the fact that you work solely for one company SHOULD mean you can't be classified as self employed BUT the fact that you could work for someone else (in your example he has several hours not working for them, that he could work for someone else) then it could be argued that he is self employed.

For example, if I find someone on here and give them work every day, and he decides thats all he wants to do, is he now employed by me, eventhough he can work elsewhere but choses not to?

A minefield

Steve at 3D is spot on. HMRC will class you as employed if you provide services to one client only. Check out the rules regarding IR35. HMRC intend to stamp out the avoidance of employer NI contributions.

Well, I must say I think I'm going to sleep like a log tonight now I know this.

Sarcasm

It is a grey area, I sub contract work using a list of drivers, and exchange sites.

That bit is easy

If I have a lot of work for a particular sub contractor at which point is he no longer a sub contractor?

If he chooses to not look for work elsewhere why is that deemed to make him an employee of mine?

If i get a contract whereby i need a driver for 3 months for say multidropping for another company is he now employed by me?

Not as easy as it sounds this one

There are those that insist you buy their uniform logo you van with their logo, and work solely for them AND they get away with being self employed... How?

I was advised recently by business gateway that as long as you advertise your services to other companies/users then this covers you. As it is not your fault no one else uses your services. Not sure how sound this advice was or is but they are a scottish goverment organisation.

At the time i was looking to take another driver to cover a multi drop assignment i have, I expressed some of the issues mentioned.

I've just been on the HRM&C website and GREY it definitely is. Words like "probably" and "can be considered as" don't hack it for me. I only deal in facts and the only fact I could come up with was the advice to call the HRM&C if in doubt!

If he also operates hid own van or gad another income source then he would be fine. If its his only work then hed gave to got ltd

Just found an Employment Status Indicator on HRM&C and to use a subbie with his own vehicle, among other things, he is classed as self employed. There was a yes/no question regarding this. I don't know what the outcome would have been if I had stated that he did not provide the vehicle. Perhaps some one else would like to try it?

My understanding if he is using their equipment and only work for them then he would fall foul of IR35 even if he set up as a Ltd co and contracted his services. IR35 was tightened to catch a lot of IT workers who worked for 1 company in that co premises with their equipment and were doing it to avoid NI etc. Toolmakers when there were still some fell foul and going by what has been said all the BBC presenters should be caught as well as they are all 'self-employed'.

He works 4 days during the week plus Saturday, 10 hours a day for £70, £7 per hour FFS

minimum wage is £6.30

The courier company must be laughing their arses off

It's a long time ago that I had a limited co but when I set it up it was just at the time IR35 was being brought in (and just about the time I started realising New Labour weren't quite the business friendly party they'd made themselves out to be), and at that time it was aimed solely at consultants setting up as limited (as I was) to pay corporation tax instead of income tax + NI. Being self employed the tax avoidance issue doesn't come into play so much, so I don't know if it's IR35 that is invoked here. There's always been a test to decide if someone should be classed as employed/self employed, as far as I know, long before IR35 came along.

Yes, it's still related to IR35 MVC. Com. I'm a little out of touch with this topic nowadays, but I believe that the NI contributions for self employed are less than the combined employer and employee contributions payable for an employee on the same income. HMRC no likey! My accountant has always maintained that I am ok being self employed OR Ltd as long as I or my company have/has more than one source of income (ie. I service More than one client).

So what happens if a driver works solely for one customer, but has a website offering his services but no one else uses him. He is avaialble for others, but doesn't get anything else.

Does that make him employed?

Or if he works for one company 99% of the time and for another company once a month... Or once a year?

Not easy for HMRC to sort out, which is probably why they haven't.

Its all a ploy to get out of paying the Nat minimum wage and employers NI, many companies are doing it and the HMRC is loathe to do owt as the economy is on its arse

If he can show that its not his only income stream then he should be fine but he should be ltd as then the company pay this ltd company rather than him.

Now its not allowed as it has set times some companys get anyway with it by rent ing the van for a penny