Southampton-based Andy Transport has received a formal warning from West of England traffic commissioner (TC) Kevin Rooney regarding the employment status of drivers.
The firm was given 14 days to prove it was using self-employed drivers legally or face having its O-licence curtailed, the deadline for which passed on 18 May.
The ultimatum was delivered by Rooney after an audit found it was subcontracting work to self-employed drivers.
Drivers had set up their own companies and invoiced for the work they had carried out.
The Office of the Traffic Commissioner (OTC) wrote to the firm asking it to explain how it met the requirements of HMRC’s IR35 legislation, which concerns tax and national insurance contributions for anyone who is contracted to work for a client.
Andy Transport claimed the drivers were registered as self-employed and responsible for tax and national insurance contributions themselves.
Rooney found the haulier had not sought legal advice before it attended a public inquiry earlier this month, and gave it 14 days to prove the employment arrangements were legal, or have its O-licence curtailed from three vehicles to one.
The TC said its evidence should include relevant case law and proof that drivers are directly employed, if that is the arrangement in place.
A spokesman for the OTC told CM the haulier had met the deadline but that “following a review of this evidence, the explanations given by the company and the assurances it has provided, the TC has recorded a formal warning on the company’s licence in relation to the issues highlighted in the case”.
However, the TC did approve a variation application to increase its licence authorisation to eight vehicles, eight trailers and to add an operating centre.
The RHA said Rooney’s action was “hugely positive news as the TCs have now made correct driver tax status an issue of repute”.
Last year the RHA warned that drivers were increasingly being paid as subcontractors, despite being classified as employees. It said this allowed the operator and driver to avoid income tax and drivers’ employment rights.