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The debate in Europe has raised various issues surrounding the
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employment status of ownerdrivers, particularly those the EC dubs 'false owner-drivers'. Are they employees, subcontractors, or genuinely self-employed? If employed, who employs them? These issues can impact on working time and holidays, national minimum wage and employment protection. They can also affect the tax situation, and HM Revenue & Customs (HMRC) take a great interest in this issue. While the tests applied by HMRC are not always in line with other case law, they are often similar.
One troublesome question that has surfaced is whether self-employed drivers or a lorry driver providing his services through his own service company can inadvertently be an employee, or indeed a subcontractor.
HMRC has launched a new version of the Employment Status Indicator on its website to check the employment status of an individual or groups of subcontractors, which may help answer this question (www.hmrc.gov.uk/calcs/esi.htm).
Various factors may give an indication of employment, but no single factor is conclusive. Someone is more likely to be classified as an employee if:
• They do not provide the equipment to do the job.
• Cannot or does not use a substitute to the job in their place.
• Works exclusively on that one job.
• Expects work to be offered, and cannot turn it down when it is. a Works on that job regularly and frequently.
Those who are not sure what category they fall into (employee, subcontractor or self-employed) should take professional advice.
Apart from all the employment risks, getting the category wrong may incur interest and penalties, as well as additional taxes, which are payable to the HMRC.