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gerlc - y drivers could be facing larger tax bills
Page 8
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OGISTICS INDUSTRY staff proider Driver Hire is warning agency rivers about new rules that could ee them fork out big sums in tax. The changes in the law, itroduced on 6 January, apply managed service companies vISCs). Previously, drivers ontracting through an MSC ere able to claim they were self
employed and benefit from the tax advantage of that status. This meant most of their earnings were in theform of dividends upon which National Insurance Contributions (NICs) are not charged.
The new law states that these temporary workers will in fact be 'employed' and will therefore have to pay the appropriate amount of tax and NICs on their earnings. Driver Hire's chief executive Chris Chidley says: "Our concern is that some scheme providers may still be claiming that temporary drivers can continue to operate a limited company through an MSC and benefit from the tax advantages. This simply isn't the case."
Drivers contracting through an MSC are being advised to move to so-called umbrella schemes which also offer tax benefits but on a smaller scale.
Chidley says: "If temporary workers arestill contract ng through a scheme, we recommend they confirm with their scheme provider or recruitment agency that it complies with the new tax rules."