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Trucking Industry UK

New tax rules for self-employed HGV drivers

New tax rules for self-employed HGV drivers

To help hauliers stay up to date with new tax rules, HMRC has published advice on how to stay compliant.

The new rules, which come into effect on 6 April this year, state that hauliers employing more than 50 staff with a turnover in excess of £10 million will no longer be able to hire HGV drivers who work through their own limited company.

The advice document sets out how HMRC will monitor organisations when taking on new lorry drivers.

The updated IR35 rules state that HGV drivers working for medium and large haulage companies will have to be employed as PAYE workers. The employer can be either the haulage company themselves, an agency or an umbrella organisation.

The new tax rules are designed to make it easier for HMRC to identify and prosecute companies for tax evasion. The responsibility now lies with the end client (rather than the HGV driver) to ensure workers are employed within the rules and that the correct amount of tax is deducted and paid.

According to the HMRC briefing document, a ‘light touch approach’ will apply to any companies failing to comply in the first year as companies get used to the new rules. However, it warns that any companies attempting to use tax avoidance schemes that side-line the new rules will face more severe penalties.

According to a spokesperson for HMRC, the document “shows what HMRC will do to identify and step in where organisations deliberately try to avoid paying what is due under rules.”

They continued by explaining: “This builds on our existing commitments to a supportive approach to help organisations comply with the new rules, and the comprehensive education and support HMRC are offering to help all those affected prepare.”

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