Freelance drivers were a no-no then and remain so today. HMRC are quite clear about that. My experience is that following an HMRC inspection it was ordered that the company I then operated ceased paying freelance drivers on invoice, or the company would be billed for their NI and income tax on the payments we had made going back six years. We got away with a warning.
The six self-employed drivers we engaged were all working for more than one company, provided bona fide invoices, were registered with HMRC and all had unique tax reference numbers.
The HMRC argued that we could not continue to pay them alongside the drivers who were doing exactly the same job on PAYE, the reasons being that the rule of substitution could not be met and a driver working in this way had no stake in our business, bringing nothing more than their attendance for work.
The driver would be given all the equipment and instructions to carry out the job with little or no scope to use his or her own initiative, unlike say a tradesman installing plumbing or electrical services in the workshop or offices. Over the years, company accountants and HMRC personnel consulted over the issue have continued to endorse this.
Advice I give to operators when carrying out audits is always on the basis that compliance is more likely to be an issue; where are freelance drivers working elsewhere and what legal hours do they have available?
Always obtain a signed declaration from the driver, checking that the driver’s activity can be proved at the roadside for the most recent 28 days. Clients are also made aware of the risks regarding HMRC inspections when using non-agency regulated drivers.
Road Transport Consultant,