Transport News looks at the impact of IR35 tax regulations on the logistics sector. By Carol Millett.
THIS MONTH marks the first anniversary of the launch of the HMRC’s new IR35 tax regulations.
Introduced in April last year the regulations rule that large and medium-sized haulage companies – with net turnover of above £10m, or 50 or more staff – can no longer hire limited company drivers. Instead, drivers need to be employed on PAYE, either by the haulier, the agency or via an umbrella company.
HMRC pledged to take a ‘softly, softly’ approach for the first 12 months to allow the industry to adapt to the changes. However, one year on, as HMRC prepares to remove the gloves, IR35 tax specialists are warning hauliers to double check that they and their driver agencies are IR35 compliant, to avoid risking eye watering fines and reputational damage down the line.
They point to the experience of the public sector, which has been operating under these regulations since 2017, and has seen a number of government departments fall foul of the regulations. Last year the Home Office was hit with tax charges and penalties totalling £33.5m.