Employment status of taxi drivers. confirmation needed!
There are several local taxi firms that run a system just like this .....
* Rota for drivers to do their shifts
* Taxi owned by taxi firm
* All Taxi expenses (fuel etc) paid for by the taxi firm
* No lease costs - the drivers get a 'split bag' remuneration
* Jobs are handed out by the operators and the fees are set.
These drivers are taken on, on a self employed basis ........... however, to me, they appear to be employed by the taxi firm.
Having read a little about this, it seems it is not very clear cut and I just wondered what everyone thought?
Replies (13)
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How do they get paid?
How does the driver get paid?
Does he hand over all take and get paid a set amount per hour? Or is it a percentage split of take ?
ESI
It is worth going through the HMRC Employment Status Indicator. If you follow the rules they will take it as binding.
www.hmrc.gov.uk/employment-status/index.htm
http://www.hmrc.gov.uk/calcs/esi.htm
They will still be classified as Self-Employed even if they get certain share in daily takings.
Only factor that can change their employment status is getting paid hourly (not cash money) and they have a service or contract of employment.There can be more add ons which i will leave on to other fellows.
Looks to me like they should be on the payroll
I would have thought a genuinely self employed driver would have bought / leased their own vehicle and paid for their own fuel.
The taxi firm also exercises an element of control, by setting driver rotas and administering the bookings.
Presumably the drivers have a choice about whether to do a shift or not. However, employees on zero hour contracts also have this choice, so that in itself would only be a weak indicator of self employment.
Whilst there may be some things in the written contracts (they do have written contracts don't they?) which help their arguments for self employment, the reality of the situation is that there is very little pointing genuinely in that direction. Their working arrangements, to me, look more like a zero hours employment.
Most mini cab companies do not have any written contracts in place with cab drivers.Unless,a driver has signed a service contract (say zero hours) + drives company's car + company's will still want him to pay his own NI and tax which will make him self-employment without any doubts.
He will be employed only if company manages his tax affairs and pays his NI contributions.
Hope this helps.
No!
company's will still want him to pay his own NI and tax which will make him self-employment without any doubts.
He will be employed only if company manages his tax affairs and pays his NI contributions.
Hope this helps.
No, no, no! What the two parties want is really only of significance if all the other factors are evenly balanced between employment and self-employment. The employer who lets the employee decide, and/or decides for himself, is heading for a fall and a huge penalty - £50,000 is not unknown.
Please read the HMRC pages I linked.
Healthpay is correct
The "intention of the parties" is only a very minor factor in determining employment status, which as Healthpay states is usually only ever used in borderline cases.
HMRC can and do challenge employment status, as they know employers / employees use it to avoid NI.
It really doesn't matter that much if the taxi drivers have registered as self employed and the taxi firm pays them as if they are self employed. HMRC will apply their tests (based upon case law) to determine what they consider the real status to be. If you the taxi firm doesn't like it then, then they can of course appeal to a Tax Tribunal, but they haven't really given themselves much ammunition to use in this case.
What most cab companies do doesn't necessarily make it correct
Most mini cab companies do not have any written contracts in place with cab drivers.Unless,a driver has signed a service contract (say zero hours) + drives company's car + company's will still want him to pay his own NI and tax which will make him self-employment without any doubts.
He will be employed only if company manages his tax affairs and pays his NI contributions.
Hope this helps.
Just because lots of cab companies may do this doesn't necessarily make it correct. Employment status is determined by applying case law to the facts.
As has been stated above, just because the taxi firm and / or the drivers want to be self employed to save tax, doesn't necessarily make them so in the eyes of HMRC.
Not having any contract in place is particularly dangerous for the taxi firm, as the drivers can turn around later and say "I genuinely thought I was employed and the taxi firm was paying my taxes".
Has the taxi firm received written confirmation of their drivers' status from HMRC?
If not, as Healthpay says, they may be in for an expensive surprise. Maybe even bankruptcy.
IMHO, it looks more like employment than self-employment.
Who pays for the vehicle insurance - presumably the taxi firm?
What does the policy say about the drivers? Are they covered as "employees", or any driver etc?
useful information
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