I’m looking for a bit of advice please. We have 6 drivers who invoice us through their limited company. Ive recently

[AndryUrman]

I’m looking for a bit of advice please.
We have 6 drivers who invoice us through their limited company.
I’ve recently completed my Transport Managers CPC course and the tutor said that this is no longer allowed and have to be either PAYE or through an agency.
I have checked online and there is some information about this from 2021-22 saying that it’s only companies that have a net turnover of more than £10 million or employ over 50 staff who can no longer use drivers who invoice through their own limited company.
Is this correct?
Any help/advice would be great.
Cheers

[allon.inside]

Here we go again……

[RJee2914]

What is the online source? If it doesn’t end in https://www.gov.uk/ or isn’t on the Traffic Commissioner’s or HMRC website then it’s not official.

[LauzaWise]

If you want to give me a call I am happy to talk you through this. 07425 582 418.

[538badtroniq]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

[Frankho]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

so do agencies have their own o licences?

[jomz1088]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

so do agencies have their own o licences?

Nope, but also not really what the original question is asking.
Please remember that the Hmrc and tc have differing criteria’s and rules.
So just because hmrc “accept”
Something regarding turnover doesn’t mean the Tc will.
Simply put its paye only, agency is accepted to cover ”peak demand” only. Don’t forget officially after a short period of time temp workers automatically get the same rights as employees. Internal agencies are also frowned upon.

[Peteines]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

so do agencies have their own o licences?

no they don't, but agencies have to follow the employment agency act 1973, well worth a read!!!

[Frankho]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

so do agencies have their own o licences?

no they don't, but agencies have to follow the employment agency act 1973, well worth a read!!!

so as long as we follow the ea act 1973 we don’t need o licence either yes?

[Peteines]

so do agencies have their own o licences?

no they don't, but agencies have to follow the employment agency act 1973, well worth a read!!!

so as long as we follow the ea act 1973 we don’t need o licence either yes?

no, agencies don't have operators licences.
I've not read the in's and outs of the act to be honest.
Might have some even reading one day when I get bored lol

[Frankho]

no they don't, but agencies have to follow the employment agency act 1973, well worth a read!!!

so as long as we follow the ea act 1973 we don’t need o licence either yes?

no, agencies don't have operators licences.
I've not read the in's and outs of the act to be honest.
Might have some even reading one day when I get bored lol

so back to my point why don’t they need o licences but every other Tom dick and
Harry does??

[Peteines]

so as long as we follow the ea act 1973 we don’t need o licence either yes?

no, agencies don't have operators licences.
I've not read the in's and outs of the act to be honest.
Might have some even reading one day when I get bored lol

so back to my point why don’t they need o licences but every other Tom dick and
Harry does??

I can’t answer that without reading the act, but I suspect there is an exemption within the act for them.
But to be honest the idea of an agency driver is just to cover short falls within a limited time scale.
Once I’ve read the full act I might be able to answer your question.

[nicuva]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

you can check them very easily by downloading the card

[Poller-Nath]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

you don't have full control over any driver or worker they have the same rights as you do whether they are employed by the company or not

[Frankho]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

you don't have full control over any driver or worker they have the same rights as you do whether they are employed by the company or not

I’ve thought and said this for a long long time. If they don’t follow simple rules then just dispose of their services no one is holding a gun to your head ffs

[Kurisure]

No you can't have drivers having own ltd companies unless they hold O'Licence, Insurance etc. Traffic Commissioners state no as you cannot discipline, tell someone who isn't employed by you what to do and have full control over them, also you are not paying PAYE, Sick pay or holiday pay to them so you are at an advantage over other companies. Also if working just for your company then this will be seen as they are not self employed as only working for one company, if working for more than you how do you no they are taking rest, breaks etc as per regulations.

so an agency has an OL do they?

[DOLLAMIN]

Can someone actually show me and others where this is actually documented.

[paulmonee]

Can someone actually show me and others where this is actually documented.

statutory document 5
Sub: 1.7 Employees

[DOLLAMIN]

Can someone actually show me and others where this is actually documented.

statutory document 5
Sub: 1.7 Employees

I don't get why you can't use self employed people if that's what the business requires.... agencies have absolutely no control or their own licence so it like many other things make no sense in this ridiculous power induced charade

[paulmonee]

Can someone actually show me and others where this is actually documented.

statutory document 5
Sub: 1.7 Employees

I don't get why you can't use self employed people if that's what the business requires.... agencies have absolutely no control or their own licence so it like many other things make no sense in this ridiculous power induced charade

As a TM my job is to ensure compliance, whether I agree with the rules or not is irrelevant and a distraction.

[Peteines]

Can someone actually show me and others where this is actually documented.

https://www.gov.uk/government/publicati ... mmediately

[DOLLAMIN]

Can someone actually show me and others where this is actually documented.

https://www.gov.uk/government/publicati ... mmediately

so if a limited company was set up as a "vehicle and job assessment" company and they're job was to specifically give an assessment of the vehicle and job it was made to do but had to do this by actually doing the job for the entirety of the job it was allocated for then who's to say who's license it should be on?
My company would do a report on the wagon the job and give any further recommendations to help improve the next job for the client

[Peteines]

Can someone actually show me and others where this is actually documented.

https://www.gov.uk/government/publicati ... mmediately

so if a limited company was set up as a "vehicle and job assessment" company and they're job was to specifically give an assessment of the vehicle and job it was made to do but had to do this by actually doing the job for the entirety of the job it was allocated for then who's to say who's license it should be on?
My company would do a report on the wagon the job and give any further recommendations to help improve the next job for the client

not really sure what you're asking, the TC has deemed using limited co drivers is basically "fronting" lending of a licence to a none licence company, as that company is using the licences holders vehicles.
It's all to do with a level playing field when it comes to competition.
Don't shot the inbox that's just what the TC's see.

[DOLLAMIN]

https://www.gov.uk/government/publicati ... mmediately

so if a limited company was set up as a "vehicle and job assessment" company and they're job was to specifically give an assessment of the vehicle and job it was made to do but had to do this by actually doing the job for the entirety of the job it was allocated for then who's to say who's license it should be on?
My company would do a report on the wagon the job and give any further recommendations to help improve the next job for the client

not really sure what you're asking, the TC has deemed using limited co drivers is basically "fronting" lending of a licence to a none licence company, as that company is using the licences holders vehicles.
It's all to do with a level playing field when it comes to competition.
Don't shot the inbox that's just what the TC's see.

I understand it's not you personally but the TCs are only saying it if your a driver but if your an assessor your looking at the full aspect of the job.

[jinChat]

so if a limited company was set up as a "vehicle and job assessment" company and they're job was to specifically give an assessment of the vehicle and job it was made to do but had to do this by actually doing the job for the entirety of the job it was allocated for then who's to say who's license it should be on?
My company would do a report on the wagon the job and give any further recommendations to help improve the next job for the client

not really sure what you're asking, the TC has deemed using limited co drivers is basically "fronting" lending of a licence to a none licence company, as that company is using the licences holders vehicles.
It's all to do with a level playing field when it comes to competition.
Don't shot the inbox that's just what the TC's see.

I understand it's not you personally but the TCs are only saying it if your a driver but if your an assessor your looking at the full aspect of the job.

and if you were, you would do that once only as a specific task. Hardly a loophole.

[DOLLAMIN]

not really sure what you're asking, the TC has deemed using limited co drivers is basically "fronting" lending of a licence to a none licence company, as that company is using the licences holders vehicles.
It's all to do with a level playing field when it comes to competition.
Don't shot the inbox that's just what the TC's see.

I understand it's not you personally but the TCs are only saying it if your a driver but if your an assessor your looking at the full aspect of the job.

and if you were, you would do that once only as a specific task. Hardly a loophole.

why would you do it only once there's no limit on how many days you can "assess" things

[jinChat]

I understand it's not you personally but the TCs are only saying it if your a driver but if your an assessor your looking at the full aspect of the job.

and if you were, you would do that once only as a specific task. Hardly a loophole.

why would you do it only once there's no limit on how many days you can "assess" things

always clever people that think they can beat the system

[rogerson]

No you cannot do self employed drivers.
Must be on PAYE
Traffic Commissioner will make heads roll if you get caught with them as self employed

[AndryUrman]

I’ve spoken to my tutor who is also an auditor and she is going to send me information confirming that drivers cannot be Ltd if it’s labour only
When I get it I’ll post it on here

[nicuva]

Yes mate! It is correct!
I have worked like that for a company for ages!! But as stated above, they meet the requirements!!

[Peteines]

This is a link to a TC ruling posted by a legal firm, there is a link within this to the full ruling by the TC.
https://www.jmw.co.uk/blog/road-transpo ... d-unlawful

[Seanza]

With them all driving as their limited companies, what they can do is change the way their business is seen rather than a driver for hire then could change the company dynamics to a driver Agency instead they will just have to sort out relevant documents, work statements etc as much as they will be covered by your insurance they will have their own etc

[sacho2853]

It’s IR35 employment rule

[KenGato]

It’s IR35 employment rule

IR35

[sacho2853]

It’s IR35 employment rule

IR35

typo

[pligwort]

It’s IR35 employment rule

So much more to it than that.

[Kingson]

Stupid rule

[pligwort]

'No longer allowed' is a bit out of date. Been there for some years. Apart from the breach of Inland Revenue requirements, the Traffic Commissioner requires Operators to be able to discipline their drivers for breach of regulations and the Company Disciplinary Procedure can only apply to employees. The other big 'no' is that Operators doing so are operating illegally on a lower cost basis and have an unfair advantage as they don't pay holiday pay, employer's National Insurance etc. Those who state they have worked like that 'for years' are risking their Operator Licence.

[richielte]

'No longer allowed' is a bit out of date. Been there for some years. Apart from the breach of Inland Revenue requirements, the Traffic Commissioner requires Operators to be able to discipline their drivers for breach of regulations and the Company Disciplinary Procedure can only apply to employees. The other big 'no' is that Operators doing so are operating illegally on a lower cost basis and have an unfair advantage as they don't pay holiday pay, employer's National Insurance etc. Those who state they have worked like that 'for years' are risking their Operator Licence.

I'm glad to see someone include the important part, "Fair Competition"!
One of reasons why we have an O licencing system in the first place

[colinge]

My Ltd Co was registered as an employment agency and had no issues

[richielte]

My Ltd Co was registered as an employment agency and had no issues

Are you an operator or a driver?

[colinge]

My Ltd Co was registered as an employment agency and had no issues

Are you an operator or a driver?

x operator then driver

[matthew]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

[richielte]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

That may work for a driver, but you need to remember that the TC's are highly educated and intelligent individuals, who are usually ex lawyers/barristers.
They expect an operator to use a legitimate employment agency, so this is something the operator would need to demonstrate to the DVSA/TC.
The driver won't be affected by the DVSA/TC as long as they are compliant, but you may still have the HMRC to contend with
Also, the TC only expects an operator to use an agency driver for peaks and troughs in the business: - eg, business spells/holiday/sickness cover.

[Kixrk]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

A friend of mine in Chesterfield was stopped by TC for using self employed/Ltd drivers. He had 6 drivers

[matthew]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

A friend of mine in Chesterfield was stopped by TC for using self employed/Ltd drivers. He had 6 drivers

if you use them all the time, yes they should be PAYE. You just switch customers occasionally. It's fully legal for both parties. I know 1 company that only uses Ltd drivers either through the drivers own "agency" companies or an agency company they have set up them selfes.

[Kixrk]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

A friend of mine in Chesterfield was stopped by TC for using self employed/Ltd drivers. He had 6 drivers

if you use them all the time, yes they should be PAYE. You just switch customers occasionally. It's fully legal for both parties. I know 1 company that only uses Ltd drivers either through the drivers own "agency" companies or an agency company they have set up them selfes.

Yes they was only working for the one operator

[mcIdol]

Drivers can have their own limited company and register it as an agency. The company is employing them, completely different to being self employed. It's not rocket science.

A friend of mine in Chesterfield was stopped by TC for using self employed/Ltd drivers. He had 6 drivers

if you use them all the time, yes they should be PAYE. You just switch customers occasionally. It's fully legal for both parties. I know 1 company that only uses Ltd drivers either through the drivers own "agency" companies or an agency company they have set up them selfes.

Legal possibly, but certainly goes against the guidance from the TC. If they ever found out the company’s O licence would be at severe risk.

[matthew]

A friend of mine in Chesterfield was stopped by TC for using self employed/Ltd drivers. He had 6 drivers

if you use them all the time, yes they should be PAYE. You just switch customers occasionally. It's fully legal for both parties. I know 1 company that only uses Ltd drivers either through the drivers own "agency" companies or an agency company they have set up them selfes.

Legal possibly, but certainly goes against the guidance from the TC. If they ever found out the company’s O licence would be at severe risk.

It's also legal if your not using the drivers all the time. So if your only using them a few days a week/holiday cover or seasonal work.

[farrepo]

Carry on and you're risking your o licence, it's that simple.
You also can't permanently use agency drivers, your staff should be on PAYE, it's that simple, and use agency for holiday cover, sickness or fluctuation in trade.

[Morector]

If Culina and all these big companies can do it then why not

[AntonsHerdy]

It’s a joke I used to be ltd company driver as I like to have lots of holidays. Now I have had to take employed post and only get 28 days hol inc bank hols. At the the time I couldn’t find regular agency work.

[bullie]

IR35 That’s all you need to know.

[mcIdol]

IR35 That’s all you need to know.

Not where an O licence is concerned. You can be IR35 compliant, but still fall outside the TC’s guidance on employing drivers hence putting your O licence at risk.

[Charlee]

The message is very clear. It has to be either PAYE or through agency. Dont take chances mate.

[pligwort]

The message is very clear. It has to be either PAYE or through agency. Dont take chances mate.

And agency can only be used to cover short term need for staff.

[chillon]

Question have you passed your operating licence exam if answer to question is yes then you should know the answer as it was in the big book you would have read

[AndryUrman]

Question have you passed your operating licence exam if answer to question is yes then you should know the answer as it was in the big book you would have read

There’s always someone who has to put a clever comment on a post where genuine advice is sought

[stephix]

Question have you passed your operating licence exam if answer to question is yes then you should know the answer as it was in the big book you would have read

There’s always someone who has to put a clever comment on a post where genuine advice is sought

it's the only thing that gives them a little tingle, ignore stupid comments

[audrina]

Inbox me. Can help you out.

[Kylessor]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

[jinChat]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

try telling the TC that!

[Kylessor]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

try telling the TC that!

they don’t encourage it but they also can do little about it since they can’t write laws.

[jinChat]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

try telling the TC that!

they don’t encourage it but they also can do little about it since they can’t write laws.

try reading As&Ds and see how often this is being dealt with

[pligwort]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

But the TC can, and does, pull Operator Licences for this

[Kylessor]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

But the TC can, and does, pull Operator Licences for this

show me an example

[pligwort]

Theres nothing solid in legislation to prevent that type of arrangement specifically, that’s why there is no yes or no answers on this topic.
As long as the company is fully compliant, a qualified person is actively taking responsibility for compliance of contractors and accountants are handling the books to ensure tax compliance then there isn’t actually any grounds to penalise an O-license or transport manager.
As a rule of thumb, larger companies won’t accept LTD because it’s too much hassle to ensure the tax compliance of the contractors.
Smaller companies however can keep a closer eye on things and still operate as long as you’re running a tight ship.

But the TC can, and does, pull Operator Licences for this

show me an example

Go through the decisions. Often part of the reason for removing licence.

[Kylessor]

But the TC can, and does, pull Operator Licences for this

show me an example

Go through the decisions. Often part of the reason for removing licence.

in other words, you can’t think of a single example where this has happened.

[martinveri]

You have no control over a limited company which is why they can’t work that way

[jockeyJolly]

https://www.jmw.co.uk/blog/road-transpo ... d-unlawful
Please read this

[catamp]

If big companies still doing it why not the small ones. When everyone will stop I will stop. The big companies had grown using ltd drivers. When I'm reaching 10mil I will employ everyone.

[Kurisure]

Yes your correct a company that turns over more than £10m and has over 50 employees don’t listen to your classroom wannabe TM/Driver this is the real world now

[GreenUnigel]

The traffic commissioner won't know I'd you don't tell them.

[assendbl]

Get the drivers to invoice for subcontracting services on a weekly rate, we do this with ltd drivers and have never had a problem.

[AndryUrman]

A couple of weeks ago I posted this question and got conflicting answers as well as the usual “clever” comments from the so called “experts”.
I sent an email to the OTC who said it wasn’t their department and passed me onto the DVSA.
They in turn sent my enquiry to the Remote Enforcement Office (REO) who sent the following email back to me.
Thanks to jockeyJolly, jinChat who gave me the initial advice.
Hope this helps and clears a few things up.