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HGV Hire Drivers Tax Changes April 2020

HGV Hire Drivers Tax Change April 2020

HGV hire drivers Tax changes 2020 for Haulage Companies, HGV Hire drivers who are not on a haulage companies payroll are to be introduced from April 2020, truck drivers who are working for your haulage company via there own personal company name, or as an independent self employed driver the tax changes could apply.

Tax changes to watch out for !

Self Employed Drivers

As of April 2020 for a driver to be considered self employed by the HMRC, they would expect the driver to be carrying out work in there own vehicle! and not driving a company vehicle, also they would be expected to have there own operators licence.

Basically if a HGV driver drives your company vehicle and is given instructions by your company of what to do and when to do it then the HMRC will not except that driver as self employed, the implications of this are that you the haulage company would be liable to pay any under-paid income tax and National Insurance and also incur interest and penalties for allowing the driver to drive for you off the books.

Drivers Driving for You as a Personal Service Company

As a haulage Company it will be necessary that the driver is operating via a UK Ltd Company, if not the haulage Company will be responsible for PAYE (Pay as you earn) and national insurance contributions on payments made.

Should the driver be operating via a UK Ltd  Company, the haulier will need to prepare for tax changes as of April 6th 2020.

It will be important to establish if the driver is liable under the terms of your agreement to IR35 (off payroll working).

The HMRC has provided a “CEST” Tool on there website to help any haulage Company determine the status of a HGV hire driver.

Should the test result indicate IR35 applies, your responsibility would be to inform the driver and anyone in the supply chain, then as of the 6th April 2020 it would be necessary to apply PAYE and National Insurance on any payments you make. 

If the “CEST” test shows that the driver is outside of IR35, you will be able to make payments as Gross.

Important! Should you as a haulage company get this process wrong you will be liable for income tax, national insurance, interest and penalties.

Agency Drivers

The agency providing a driver would need to be UK Registered, if not you would have to operate PAYE & National insurance on any payments you make.

As long as the Agency is UK Registered the responsibility for an Agency driver is that of the agency and not the haulage company.

Legislation Update

The IR35 Legislation will now not come into effect until 6th April 2021 due to the coronavirus pandemic. 

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