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IR35 – Compliance is Key

6th April 2021 ushered in the postponed IR35 implementation, seemingly unnoticed by many.

The original concept to capture white collar workers working on a self employed basis to Govt Agencies has spilled into the blue collar private sector. It’s not new, having been on the Statute books since 2018. The question of “can trade plate drivers continue to work on a self-employed basis?” is heavily dependent on their operating model. However, after running various scenarios through the HMRC CEST Calculator it appears difficult to justify outside of the “spot market” bidding platforms. Whilst seeking professional advice is necessary it appears to be only those drivers that have multiple clients, their own plates and insurance, and have contractual culpability will qualify to remain outside IR35.

 

What does this mean?

Drivers will need to be employed, either directly or by an agent, who in turn are responsible for ensuring the drivers employment rights are met and their NIC and tax payment are correctly deducted. This will add c25% to the cost of resourcing trade plate provision. It is recognized that trade plate movements is a marginal charging service and the additional cost burden is unlikely to be fully absorbed by the contractor.

If you are involved with procuring vehicle logistics you may wish to ask current and potential suppliers about their operating model and confirm they are IR35 compliant (are their drivers operating inside or outside of IR35?). It should form part of your own due diligence checks.

There will be a commercial impact with supplying trade plate logistics going forward and the pool of employed resources in this sector is clearly finite. Future procurement planning should be reviewed to incorporate this.

At VQS we have future proofed clients with the impact of IR35 by increasing our own fully employed driver teams. They are paid for hours attended and not just hours driven ensuring their salary reflects fairly on their commitment to our business

To do so is pro-active and responsible and our operating model of using chase vehicles ensures we fully support them and non-reliant on public transport.

For further information  https://www.gov.uk/guidance/check-employment-status-for-tax is a useful tool to understand who qualifies for inside/outside of IR35 regulations.

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