Kammac's tax-save plan still in doubt
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THE LEGALITY of a self-employed drivers' scheme still remains undecided, after the Transport Tribunal suggested that the legal aspects of the case could not be dealt with by the Tribunal.
Kammac Trucking of Burscough (CM, August 13, 1983) runs a fleet of 16 artics and trailers with a turnover last year of around El m. The Road Haulage Association took Kammac before North-Western Licensing Authority Roy Hutchings last August to test the legality of the company employing drivers from a pool of selfemployed drivers. Using this method Kammac did not have to pay the drivers' income tax and national insurance contributions.
The RHA said at the Tribunal that it wanted to find out if the drivers were self-employed or employees. It argued that this matter was under the jurisdic tion of the Tribunal and the LA, as it was an activity that needed consideration when Kammac applied for a variance to its licence.
Representing the RHA, John Backhouse said that if the basis on which drivers are engaged is an activity of the directors, then it is a matter involving the LA. "If the LA does not look at it, then he has not carried out his duty," he said.
Tribunal president John lnskip said that representatives from the Department of Health and Social Security and from the Inland Revenue were present at the public inquiry in August to give evidence that they were happy with the tax arrangements of the drivers.
He said that the RHA could have questioned them over the matter, but declined to do so.
Mr Backhouse replied that although the Inland Revenue was happy with the situation at present, there was nothing to stop it changing its mind at a later date and demanding back taxes, which would be considerable.
"If you decide that the drivers are self-employed then the company is doing nothing wrong in continuing to operate that way," Mr Backhouse said. "The RHA would be happy with this." He said that such a result would be of benefit to many operators wanting to compete in a similar way.
However, Mr Backhouse called on the Tribunal to view the drivers as employees.
Representing Kammac, Arthur Noble said that the Tribunal was the wrong place to seek guidance on the legality of the self-employed drivers' scheme. He added that the RHA had changed the basis of its objection, which was not allowed.
Mr Noble said that the RHA's original concern had been the financial viability of the company. He had had ample opportunity to explore this avenue before the LA in August.
Mr Backhouse said that he thought the Tribunal was the right place for the procedings at the present time, but that a court or even Parliament might be considered as a next step. He said that the question of the scheme's legality was one that had to be answered at some time.
Mr Noble tried to get costs awarded against the RHA for its "victimisation" of the company, but The Tribunal refused this as the procedings were not vexatious.