As a lorry driver, knowing which tax legislations apply to you is crucial to ensuring you can do your job properly. The IR35 Legislation, introduced by the UK Government in 2000, is central to this, designed to halt instances of tax evasion. But what do you need to know specifically, and why is it important to bear the IR35 in mind whilst at work?
A guide to IR35 Legislation
First things first, let’s take a look at what the IR35 Legislation specifically enforces. To summarise, IR35 was created to, as mentioned, prevent contractors from committing tax avoidance. This specifically applies to contractors who are running limited companies but are also employees, also known as “disguise contractors”. As these contractors pay national insurance and taxes as employees, they were previously able to evade taxes that apply to limited companies.
How does IR35 affect me?
IR35 applies to you if you’re gaining benefits as a contractor and a limited company owner but also working as an employee as far as HMRC is concerned: in other words, you’re ‘inside’ IR35. This is when you need to be aware of IR35 as a truck driver, as the rules can be confusing, and you don’t want to be fined for not paying the correct fees. IR35 will affect you if: - You work for one client exclusively. In other words, it appears as if you’re an employee of that company. - You have a specific working pattern. If you’re at work at set times, you need to be aware of why and be prepared to outline this.
IR35 won’t affect you if:
You’re working contract to contract. You’re clearly not employed by a singular business. - You’re paid on a per-project basis. Again, it’s clear that you’re working as a contractor rather than an employee. - Your contract can be covered by another available contractor (in this case, driver). If you have a driving job and, for whatever reason, are unavailable, another qualified driver can jump in and take the job. This isn’t typical for employees in other environments.
Don’t be concerned: contact an expert
The IR35 Legislation is one of the more difficult tax legislation laws to contend with. However, once you’ve understood how it applies to you specifically, you can continue driving knowing that you’re paying the correct taxes. If you’re concerned on unsure for any reason, contact an expert tax advisor, or if you don’t know one drop us a line and we’ll be able to introduce you to one.