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Do freelance lorry drivers need a limited comany?

Do freelance lorry drivers need a limited comany?

I have recently been approached by several lorry drivers who variously want to be self employed (this is to do with the working time directive) but have come up with a snag that agencies want touch them unless they are a ltd co. They say it is to do with tax liability. Several agencies are trying to push them into a sort of "franchise" which appears to cream their profits and they don't like that idea. Any suggestions please
John Barratt


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By Anonymous
01st Apr 2005 21:56

More on drivers hours - see TV next Monday
I now understand that the new rules come into effect on Monday 4 April 2005 and the BBC2 TV programme (1230pm Monday 4 April 2005) will highlight the problems caused by the new rules.

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By Anonymous
13th Mar 2005 09:54

More info on WHD
I have just come across a magazine article (dated 10 Feb 2005 in "routeONE" magazine) which says :-

" Self-employed drivers are exempt until March 2009, but the definition of self-employed is very tight. The test is not the same as that applied by thr Inland Revenue, The Employment Rights Act 1996 or Working Time Regulations 1998. Broadly speaking "self-employed" means: the main occupation is driving; not tied to an employer by an employment contract or 'other type of hierarchial relationship'; free to organise your own working activities; have commercial relations with several customers and income depends directly on the profits made. Most agency workers will not count as self-employed because they are paid at a fixed rate, and when they accept a job, they are not free to organise their working activities. "

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By Anonymous
01st Mar 2005 22:29

Two sorts of hours rules
I think there are TWO categories of working hours rules that apply to commercial drivers.

FIRSTLY, driving hours restricted for safety reasons with rules concerning breaks and how long can be worked continuously or over a given timespan - policed via tachograph rules and records in lorries. This requirement is not new and no way can it be bypassed by choosing a particular status of the worker.

SECONDLY - this is new - the extension of the working hours directive (WHD) to transport workers, which I think is imminent. The UK was considering an opt-out, but presumably the rest of the EC won't let us, hence the current problem. So far as I am aware, the working hours directive cannot be imposed on how long a sole trader or a partner in a partnership works him/herself. However, once the entity is a limited company I see no way round the rules as we have an employer and an employee situation. Now, IF the only way that the directive can be enforced is with the co-operation of the worker, I wonder what happens here - will a director really willingly be a prosecution witness against his employer (his own company) ? A bit like the National Minimum Wage here !

However, if the working hours directive REPLACES the old driving hours rules, then we are into the serious matter of road safety and no way would I condone or recommend trying to bypass them - perhaps an employment lawyer can enlighten us ?

PS. A recent newspaper report did state that many large companies were going to have to additionally use self employed workers as the driving industry is already short of skilled labour and there will consequently be an immediate labour resource shortgage as soon as the WHD is implemented. The inference was that that the WHD would not apply to the self-employed.

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By NeilW
01st Mar 2005 14:13

Slopey shoulders
Agents only make money if there is no risk.

From a tax point of view an agent must pay people net of PAYE tax if they retain them directly as an individual. However if they retain via a Ltd Co. then the tax problems become the individual's - mostly via the notorious IR35.

The 'franchise' you mention is an umbrella company who is no doubt giving the agent a backhander.

The obvious answer is not to work via agents, but that it easier said than done.

Bear in mind that the working time directive applies to 'workers' as well as employees. Anybody retaining them will still need to ensure that the basic terms of the directive are adhered to even if they don't employ them.


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By tom123
01st Mar 2005 15:48

Drivers hours
Don't forget that drivers hours rules will apply whatever the employment arrangements.

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By NRF ltd
30th Aug 2016 15:55

If your a sole trader working for an agency the won't use you unless you use there umbrella company to pay tax and ni,

Most freelance drivers should know about IR 35

Being a ltd company working for an agency they prefer this as it takes out the ir 35 ruling gives the agency higher profits and less liability

Advice for the drivers look for their own work being ltd gives the clients more faith and get an ir 35 friendly contract in place

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