Operator loses appeal against HMRC's self-employed driver ruling

Ashleigh Wight
February 8, 2017


An aggregates haulier has lost its legal challenge against HMRC’s finding that its drivers should be classed as employed, rather than self-employed.

The First-Tier Tribunal found that partnership RS Dhillon and GP Dhillon, which trades as London Goods Transport, should have treated its drivers as employees and should have been paying PAYE and National Insurance contributions.

It said that despite there being no written contracts between the Iver, Buckinghamshire-based operator and its drivers, managing partner Resham Dhillon was “very much the boss in the relationship”.

A hearing in July was told that the operator provided the drivers with vehicles in its customers’ liveries, but drivers were expected to provide their own personal protective equipment (PPE) and swap shifts with other drivers if they ran out of hours or could not complete the work.

Drivers were paid a fixed amount per shift and received no other pay, such as holiday pay, other than occasional discretionary bonuses.

Dhillon told the hearing that the pool of drivers it used could refuse work at any time and could work for other operators if they so wished, however the Tribunal found some continued to work for the business for four or more years with limited evidence of them working for other firms.

HMRC argued that the arrangement required the drivers to carry out the work given to them in person; gave the partnership sufficient control over the drivers; that drivers did not have sufficient financial risk to suggest they were self-employed; and that the overall picture was one where the drivers were integrated into the operation.

The First-Tier Tribunal found that a contract was formed each time a driver accepted an offer from the business, agreeing they would carry out a specific delivery using a specific vehicle, and conform with the requirement to wear PPE and follow customers’ health and safety rules.

HMRC said the business had exerted control over the drivers and found there was no evidence that the drivers were running their own businesses. It also stressed that some drivers were paid over £25,000 a year by the operator and received regular work from it, in contrast with a self-employed person who would likely work for multiple businesses.

In his decision last month, judge Zachary Citron said: “The drivers were engaged on unwritten, short term contracts, on standard terms largely dictated by the appellant.”

He said the drivers were largely “day labourers” engaged on terms that were unwritten, uncomplicated and non-negotiable.

“Mr Dhillon, the managing partner of the appellant, was, in our perception, very much the “boss” in this relationship; and it is this, combined with the near-total absence of evidence that the drivers were running their own businesses, that leads us to decide that the drivers were employees of the appellant rather than self-employed contractors,” the judge said.

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