Off-payroll working: Hauliers could face heavy fines from HMRC

Off-payroll working: Hauliers could face heavy fines from HMRC

New off-payroll working rules were brought in last April and it is important that haulage firms and driving agencies check that they are compliant with the new rules.

 

What are the off-payroll working rules?

The IR35 legislation was introduced in 2000 to ensure that individuals working through an intermediary (often a personal service company – PSC) pay broadly the same amount of income tax and national insurance contributions as direct employees.

The off-payroll working rules stipulate who is responsible for determining the employment status and paying the necessary tax and NICs.

 

What has changed?

The off-payroll working rules were reformed for the public sector in April 2017.  This shifted the responsibility for determining employment status and paying the necessary tax and NICs from the individual working through the intermediary to the public authority engaging them.

The reformed rules were extended to medium and larger-sized businesses in the private sector from April 2021. Prior to this date, it was the responsibility of the PSC to consider employment status and account for tax and NICs where necessary, but from April 2021 this responsibility shifted to the engager.

In February 2021, HMRC declared that there will not be any penalties for the first 12 months of these new rules (unless was deliberate non-compliance).  The soft landing period ended on 6 April 2022 so it is vital that businesses comply with the new rules.

In addition to this, organisations will need to check if the employee falls within the scope of IR35 using the HMRC Check Employment Status for Tax Tool available online.

 

What will the consequences be for non-compliance?

Non-compliant companies could be hit with very significant penalties.  In 2021 the Home Office were issued tax charges and penalties worth £33.5m after they were found to be non-compliant under IR35 regulations.

it is vitally important to make sure you understand the new rules and ensure your organisation is compliant.

 

Always conduct your own due diligence

If you are informed by a third-party organisation that your drivers comply with IR35 regulations, we recommend that you conduct you own due diligence as well. If the third-party due diligence is incorrect then your organisation will be liable for breaking the rules and can be issued with penalties.

 

What should I do?

  • Look at your workforce (including those engaged through agencies and other intermediaries) to identify those individuals who are supplying their services through PSCs.

 

 

  • Talk to your contractors about whether the off-payroll rules apply to their role.

 

  • Put processes in place to determine if the off-payroll rules apply to future engagements. These might include who in your organisation should make a determination and how payments will be made to contractors within the off-payroll rules.

 

How can we help?

At Hawsons we have a dedicated team of transport and logistics accountants at our offices in Sheffield, Doncaster, and Northampton.

We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

Nearly every other commercial sector is reliant on the services transport and logistic businesses provide and, in many ways, this specialist sector is the linchpin for our country’s economy.

With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively.

Free initial meeting

Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262

Craig Walker

Tax Director, Sheffield

0114 266 7141

Aaron Hemmington

Tax Partner, Northampton

01604 645 600

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HGV driver shortage is easing, but will it be short-lived?

HGV driver shortage is easing, but will it be short-lived?

Pallet-Track chief executive Caroline Green has reported there are promising signs that we could be through the worst of the HGV driver shortage crisis.

 

Wage increases and more tests easing HGV driver shortage

Since the height of the HGV driver shortage in September 2021, which was largely caused by the ‘pingdemic’ and Brexit-related issues, we have seen the noise around the HGV driver subside for a number of reasons.

Firstly, there have been significant pay rises across the sector. This has persuaded many drivers to return to the sector to take advantage of these increased rates of pay. Furthermore, bonuses and flexible shift patterns, as well as the implementation of government schemes, such as Skills Bootcamps, and fast-tracking HGV driver tests have helped ease the shortage.

However, top haulage and logistics firms have warned that wage increases will need to be maintained, else the easing of the HGV driver shortage may be short-lived.

Secondly, we are now seeing more HGV tests being conducted. Caroline Green believes that more trainee HGV drivers are coming through the testing system, but says that more needs to be done to make the sector a more attractive job prospect for new recruits.

 

Underlying causes of HGV driver shortage still unresolved

Despite this Caroline Green has warned that issues such as Driver CPC becoming unpopular among older HGV drivers and low-quality facilities are still yet to be resolved.

With the Omicron variant of COVID-19 still being a concern, another ‘pingdemic’ could create another severe HGV driver shortage.

Although the HGV driver shortage is easing and we are not in a state of crisis, many haulage and logistics firms are reporting that they are still short of drivers and that the driver situation is not ideal.

The underlying issues currently facing the sector mean that we are only another ‘pingdemic’ away from a potential HGV driver crisis.

Paul Wormald, Transport partner for Hawsons commented:

We commented last year how the Nation’s lorry drivers are an often neglected element of the UK’s workforce, often having to work long, unsociable hours in less than ideal working conditions, and how they are indispensable to the UK economy.

From a macro economic viewpoint, it is good to hear that this acute pressure on the sector may be beginning to ease as pure economics dictate that if there is a scarcity of properly trained drivers, then hauliers are likely face increasing wage costs to attract the drivers they need. This in turn will filter its way to end-users in increased prices.

The early signs of stabilisation in the market for drivers may bring some marginally increased certainty for haulage firms anxious about spiralling wage bills, however, it would seem that there is still some way to go to bring longer-term certainty to the HGV driver market.

 

How can we help?

At Hawsons we have a dedicated team of transport and logistics accountants at our offices in Sheffield, Doncaster, and Northampton.

We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

Nearly every other commercial sector is reliant on the services transport and logistic businesses provide and, in many ways, this specialist sector is the linchpin for our country’s economy.

With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Paul Wormald, Partner

Paul Wormald

Partner, Doncaster

01302 367 262

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Rail fares due to increase in March by 3.8%

Rail fares due to increase in March by 3.8%

Rail fares increase in line with July’s RPI inflation rate

The government has confirmed that rail fares across England are due to increase by 3.8% in March 2022. This is the largest increase in rail fares within the last nine years with the increase being in line with July’s RPI inflation rate. However, this increase is less than many feared as rail fares increased by more than RPI inflation rate in March 2021.

 

Will the rail fare price increase result in fewer passengers?

Due to the pandemic, an increasing amount of people are now working from home, especially those that are in the commuter belt who will often use the train to travel to nearby cities for work.

This additional price increase is likely to result in fewer people using the train than in previous years. Industry leaders have suggested a freeze in rail fare prices in an attempt to get more passengers back on the railway. But, due to the new Omicron variant of Covid-19 passenger numbers are now falling again after a peak in November 2021 at around 70% of the pre-pandemic levels.

 

Treasury keen to reduce subsidy in rail

The government has invested over £14bn into rail services during the pandemic in order to keep rail services running. They have said that this fare increase would contribute towards meeting some of these costs. The rail minister Chris Heaton Harris has said that keeping rail fares in line with inflation strikes a fair balance.

The increase will be officially applied to regulated fares in England alone. However, it is likely that it will be reflected throughout the UK. Shadow transport secretary, Louise Haigh, has said that families who are already facing increasing taxes and bills will now be hit with a large increase to their daily commute costs which people may not be able to afford.

Others have also criticised the move as Paul Tuohy chief executive of Campaign for Better Transport has said that rail should be made as the affordable choice if the government is serious about reducing transport’s carbon footprint and believes rail fares should have been frozen to match the fuel duty freeze for cars.

 

How can we help?

At Hawsons we have a dedicated team of Transport and Logistics accountants at our offices in Sheffield, Doncaster, and Northampton.

We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

Nearly every other commercial sector is reliant on the services transport and logistic businesses provide and, in many ways, this specialist sector is the linchpin for our country’s economy.

With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

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All New Vehicles to be Zero Emission in the UK by 2040

All New Vehicles to be Zero Emission in the UK by 2040

Zero-Emission Vehicles

The UK has confirmed that all new HGVs in the UK will be zero-emission by 2040. Furthermore, by 2035, the UK has committed to phasing out all-new non-zero-emission HGV’s weighing 26 tonnes or less. This is in addition to the UK’s 2030 phase out for petrol and diesel cars and vans. At COP26 a group of industry leaders and ministers committed to working towards 100% zero-emission new car and van sales by 2040 globally and 2035 in leading markets. At the World Leaders Summit, 30 countries agreed to make zero-emission vehicles the new normal by 2030 as part of the new Glasgow Breakthroughs. This included making them more accessible, affordable, and sustainable.

UK’s electric vehicle charge point concept

The UK government has revealed its new design for electric vehicle charge points. A design that could become iconic in years to come much like the Great British red post box or the London black cab. The aim was to design something inclusive and easy to use much like the traditional petrol pump. The concept also aims to increase excitement and awareness surrounding electric vehicles as the UK starts to build one of the most affordable and reliable charging networks across the globe. Currently, zero-emission vehicles are less expensive to run in the UK than petrol or diesel vehicles. In addition, it is expected that they will become less expensive to purchase in years to come as zero-emissions vehicles become more popular.

Transport Partner Paul Wormald commented:

The ability for goods and people to travel quickly and conveniently is key to an efficient economic system, however, this needs to be combined with a focus on sustainability and how our modes of transport, and transport infrastructure impact on the wider environment. The recent COP26 summit gave an opportunity for world leaders to set a framework as to how this may be achieved.

The commitment to phasing out conventionally fuelled motor transport will present a wide range of opportunities and challenges for many businesses across the whole economic spectrum, and it will be interesting to observe how these play out on a practical level over the coming years.

How can we help?

At Hawsons we have a dedicated team of transport and logistics accountants at our offices in Sheffield, Doncaster, and Northampton. We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.
With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively.

More from our transport and logistics experts

You can find all of our latest transport and logistics sector news and newsletters here.

If you are looking for advice in a particular area, please get in touch with your usual Hawsons contact.

Alternatively, we offer all new clients a free initial meeting to have a discussion about their own personal circumstances – find out more or book your free initial meeting here. We have offices in Sheffield, Doncaster and Northampton.

Free initial meeting

Paul Wormald

Partner, Doncaster

01302 367 262

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Government plans to create additional 50,000 lorry tests

Government plans to create additional 50,000 lorry tests

On 10th September the government announced plans of how they will create an additional 50,000 lorry tests to tackle the current HGV driver shortage. The government plan to make changes to tests that will come into force as soon as possible. Industry leaders supported the proposed changes in a public consultation over the summer. It is claimed that the proposed changes will not affect the standard of driving required to pass HGV tests.

 

Proposed changes

Under the government’s new proposals learner lorry drivers will be able to take the articulated lorry test without having to pass the rigid lorry test first. This change will free up test space for those looking to drive rigid lorries only.

Learner bus and coach drivers will be able to go straight for a bus and coach test with a trailer without needing to pass the test without a trailer first.

These changes will have zero effect on the standard of tests and if legal processes are completed successfully, the government anticipate that the regulations will be changed as soon as possible.

 

What should I do if I have a rigid lorry test booked?

If you have drivers who have already booked their rigid lorry test, the government recommend you communicate to your drivers and come to a decision about their upcoming test. It might be beneficial for some to wait for the legislation to change as you will be required to take fewer tests to drive an articulated lorry and a bus or coach test with a trailer.

 

Hawsons Transport and Logistics partner Paul Wormald comments:

The economy as a whole is experiencing acute supply-side challenges with delays in the supply of a wide range of goods. The current shortage of competent qualified HGV drivers is contributing to this, and putting upward pressure on the wages that drivers can demand. This in turn is likely to have knock-on effects on the rate of inflation generally.

It is clear that the government needed to do something to address the current situation and hopefully, these measures will go some way to increase the supply of drivers into the market. However, further steps still need to be taken to help promote lorry driving as an attractive occupation for the younger generation to avoid more chronic shortages in future years.

 

How can we help?

At Hawsons we have a dedicated team of transport and logistics accountants at our offices in Sheffield, Doncaster, and Northampton. We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

Nearly every other commercial sector is reliant on the services transport and logistic businesses provide and, in many ways, this specialist sector is the linchpin for our country’s economy.

With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year round involvement, we can help you anticipate and deal with challenges quickly and effectively.

Free initial meeting

Paul Wormald

Partner, Doncaster

01302 367 262

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Department for Transport open letter to UK Logistics Sector

Department for Transport open letter to UK Logistics Sector

The Department for Transport has issued an open letter to the UK Logistics Sector regarding the current HGV driver shortage. The letter outlines the government’s plans on how they will help tackle the problem.

The first measure referenced in the letter is regarding the backlog of HGV driver tests that is preventing new HGV drivers from coming into the job. The Department for Transport recognises that increasing testing capacity is key to providing additional drivers. They say that the DVLA is developing solutions to increase testing capacity and are now passing 1,500 tests per week compared to 1,150 pre COVID. This has been achieved by increasing staff numbers and using overtime.

Further measures include increasing testing capacity which will involve consulting about the delegation of off-road manoeuvres in the Heavy Goods Vehicle driving test. It is also being considered whether or not to issue provisional license entitlements for articulated lorries at the same time as rigid lorries. This would allow those wanting to take the articulated lorry test to be able to skip the rigid lorry practical test which would free up more capacity for the rigid lorry practical test.

The second measure discussed in this open letter is the cost of training to become a Heavy Goods Vehicle driver. The Department for Transport is currently reviewing proposals for financial support created by industry sources to help improve driver recruitment. There will also be a revised Large Goods Vehicle Driver apprenticeship which will be available from 2nd August 2021. The revised apprenticeship will include an increased funding band of £7,000.

Finally, the Department for Transport has confirmed that they will continue working with the industry to create advertising content that will promote and encourage more people into the haulage industry.

If you would like to find out more you can find the full letter from the Department for Transport here

 

How can we help?

At Hawsons we have a dedicated team of transport and logistics accountants at our offices in Sheffield, Doncaster, and Northampton. We act for a large number of clients in this sector across our three offices, ranging from hauliers to international couriers, and understand the challenges this dynamic sector faces.

Nearly every other commercial sector is reliant on the services transport and logistic businesses provide and, in many ways, this specialist sector is the linchpin for our country’s economy.

With our experience in the transport and logistics sector we are able to develop a close understanding of your business and, through active year-round involvement, we can help you anticipate and deal with challenges quickly and effectively.

Free initial meeting

Paul Wormald

Partner, Doncaster

01302 367 262

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Introduction We have summarised the key rates and allowances which are fundamental to our business and personal lives. We are sure that you will find them a useful point of reference and have set out below a few examples of how they can be used. Personal tax rates As...

Spring Statement 2022

Spring Statement 2022 Against a backdrop of rising inflation, Chancellor Rishi Sunak presented his first Spring Statement on Wednesday 23 March 2022. In his Spring Statement, the Chancellor announced a cut in fuel duty for petrol and diesel as he sought to ease the...