Vale & West Chartered Accountants Blog

Do I need to rethink my IR35 strategy while there is a shortage of lorry drivers?

Due to Brexit, driver retirement and the enforced IR35 reform, there is now a shortage of Heavy Goods Vehicle (HGV) drivers in the UK – around 100,000, according to some estimates.

Therefore, businesses must reconsider their risk-averse strategies for managing any tax changes related to employment.

IR35 specialists have revealed that re-evaluating approaches to status determination may be vital for businesses to be able to attract flexible employees.

What is IR35?

The off-payroll working rules, more commonly referred to as the IR35 reform, began on 6 April 2021 for the private sector.

Medium and large businesses are now responsible for determining a contractor’s IR35 status.

Business owners or managers need to assess the contracted worker’s status to determine if they are self-employed, meaning they are outside IR35 or work in a way that reflects employment, meaning they are inside IR35.

Additionally, the end client or recruitment agency is also responsible for liability when hiring a contracted worker – meaning they are responsible for paying the worker.

How did businesses react to IR35?

In response to the IR35 reform, some companies required all contracted workers to operate within IR35 under blanket determinations.

However, in doing so, many genuinely self-employed workers have had no choice but to become employees or work ‘inside IR35’, including some lorry drivers.

In becoming employees, these contractors will be subject to tax and national insurance similar to a regular employee.

What can businesses do?

To obtain and entice new contractors, we advise business owners to rethink their current IR35-related strategies to ensure they are appealing and fair to workers.

As expert advice is needed, please contact us at your earliest convenience.

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