New IR35 rules kick in

Operators must check their drivers comply with the new IR35 tax regulations which kicked in this week or risk being fined by HMRC.

From 6 April large and medium-sized haulage companies – with net turnover of more than £10m or employ 50 or more staff – will no longer be able to hire drivers who work as limited companies. Instead, drivers will need to be employed as a PAYE (pay-as-you-earn) worker, either by the haulier, the agency or via an umbrella company.

The changes make it easier for HMRC to prevent tax evasion by switching the onus from the limited company driver to the end client, who must ensure their agency worker is employed within the rules and will be responsible for any underpayment of tax by the driver.

The end client or agency also becomes responsible for deducting the relevant tax and National Insurance contributions at source.

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