RHA warns hauliers and drivers on dodgy self-employment advice

The RHA is calling on hauliers and drivers to beware of taking the wrong tax advice on employment status. 

It follows reports that HMRC has taken action against driving agencies and managed service companies that provide wrong advice to the haulage sector.

Haulage companies and workers are being sold schemes that are very aggressive and they may not be told about tax legislation – including national insurance contributions, says the RHA.  This can lead to arrears of tax, interest and penalties.

“In this industry, it is rare for someone to be genuinely self-employed unless they are an owner-driver,” RHA Chief Executive Richard Burnett said. “However, whether someone is employed or self-employed is not a matter of choice but is determined by the particular terms and conditions under which a person works.”

Broadly speaking, someone is self-employed if they are in business on their own account and bear the responsibility for the success or failure of that business.  They will be employed if they personally work under the control of their engager, and do not run the risks of having a business themselves.

Evidence has now emerged that haulage companies are sold the idea that they can set up, or have an agent set up, companies for their workers and avoid tax.

Employers using agency drivers with self-employed status or who are hired through ‘umbrella’ companies are warned that HM Revenue & Customs may well take action as they are likely to be breaking the rules, and could face substantial penalties.

Richard Burnett added:  “This practice is not new, but we are pleased that HMRC is taking steps to eradicate companies and individuals that supply false information – information that thousands of drivers are taking in good faith.”