Taxman queries ARC owner-driver status
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by Karen Miles • The tax status of thousands of ownerdrivers working exclusively for one company is under threat from the Inland Revenue, which is suggesting that they should be classed as employees rather than self-employed.
Tax inspectors have challenged the tax status of an owner-driver working for aggregates producer ARC in what could be a test case for thousands of drivers nationwide. He should be classed as an employee because he works solely for ARC, says the Revenue. The challenge will trigger alarm bells at ARC and other operators which use thousands of self-employed drivers on an exclusive basis.
The Kent-based driver at the centre of the dispute is fighting the IR move with support from ARC, which fears that any back tax bill could lead to a flood of similar liabilities on its other drivers. This could raise questions about the basis of similar arrangements by other companies. Up to now it has been assumed that such selfemployed schemes were acceptable to the taxman.
Drivers on contract to ARC own their vehicles, pay all running costs and are paid by the load. They are not normally allowed to work for other firms.
If the controversial Inland Revenue ruling is challenged it will first go to the General Commissioners, an independent lay-body. If either party wishes to fight the Commissioner's ruling the case could be fought through the High Court, Appeal Court and House of Lords.