I have, yet again, to visit this perennial topic because of media meddling!
The culprit this time is Commercial Motor and their associated legal provider, aided by The Traffic Commissioner. The post via social media raises the thorny issue of Self-Employed Freight Haulier, referring back to my earlier posts relating to this topic I have addressed this issue simply saying accountants should endorse the statement that being a self-employed truck driver, with a continuous contract contravenes the IR35 ruling and can place you squarely inside the ruling, exposing you to historical tax and NIC. HMRC’s powers in this area have increased to include the “line of least resistance” in that if the substantial sum cannot be recovered from the individual (with limited means) they have power to apply the ruling to the end user (your Boss or Haulier).
The tax rules surrounding this statement are complex and I don’t want to visit them again, please contact us for a detailed analysis if required. However I am pleased to be able expand on our client’s status for those concerned.
Providing your professional services through your own Limited Company has never been an issue with The Chancellor, please note I am not referring to Commercial Motor, Solicitors or The Traffic Commissioner. The Chancellor with support from HMRC administers parliamentary decision that affect the general public and tax payers in particular, no other body has a say in this matter. The Chancellor would wish that all workers choose an option that will provide the treasury with adequate tax revenues and the additional taxation once called National Insurance, shall see this is always sufficient. Employed Status is the best fix for the Chancellors desires, therefore if a professional (and I do mean every freight driver) wishes to have flexible working patterns, the ability to pursue the best rates for his or her services, then a Limited entity is the best option.
I do not endorse someone registering a limited company and under its banner hope that he or she maintains a safe distance from the Authorities. This will not work and is not robust enough to please the Chancellor, the correct way is to seek advice from professionals in the field, who like us, would ensure the company has more than a single shareholding (opportunity for growth) have a full and comprehensive set of Articles and Memorandum (at least 32 pages) a share certificate confirming their holding within the company, a PAYE Scheme registered with HMRC and diligently filed each and every month through RTI, to record his or her liability for Income tax and National Insurance. At the year end a comprehensive set of accounts are to be filed at Companies House along with a taxation computation (CT600) outlining reserves, after Corporation Tax. Finally the filing of a Self-Assessment return, at fiscal year end, to record salary (P60) and any dividends awarded out of reserves and liable for dividend tax.
The completion of the above raises the status of the professional driver offering his or her services to any end user to one of compliance with the Chancellors wishes, none of the above relates to a Self-Employed driver who remains non compliant with IR35, and will bring the end user into conflict with governing bodies particularly HMRC and DWP.
I would hope this is the last time I have to rant about independent, flexible and compliant working methods.