IR35: More tax changes for self employed drivers and hauliers

In   his mini-budget on September 23, the Chancellor announced that the IR35 tax changes which have been brought in over the past few years are to be scrapped. Executive director of Policy and Public Affairs at the RHA, Rod McKenzie, outlines what has happened.

Rod McKenzie, Executive Director - Policy and Public Affairs

They’ve caused controversy with HGV drivers who quit staff jobs to go freelance or work for umbrella companies attracting large tax bills.

They believed they would be earning more through paying less tax and national insurance. Equally for employers, it placed an additional administrative burden and meant they were losing staff drivers to agencies.

So what does it mean?

So, the proposed change removes those IR35 changes introduced since 2017. The proposed date for this to occur is at April 2023.

If the proposals are introduced, it will no longer be the responsibility of the haulage company to determine if a driver engaged is caught by IR35.

It will be an issue for the driver to determine themselves and if IR35 applies for them. They would then have to declare this on their self-assessment return and pay over the increased tax/National Insurance.

So, these changes significantly reduces the administration for the haulage contractor and also the associated risks. It passes that work and risk to the drivers themselves.

We wait for HMRC to inform us of how this will work in practice.

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