Tax code

Changes in the tax code influenced the truckers crisis – “The shortage was created by the Chancellor! | United Kingdom | New

Rather, i’s analysis shows that Brexit or the factors caused by the pandemic, a change in the tax code caused truck drivers to leave the industry in droves. In April 2021, the government changed the rules that decide whether someone who works for a company is considered an employee or an entrepreneur.

The rules known as IR35, or non-payroll work rules, previously allowed truck drivers to decide whether they were employees or contractors.

A large number of drivers classified themselves as subcontractors, which left them without permanent job protection but provided them with a reduced tax bill.

Employees supported the measures because they did not have to pay social benefits or pay national insurance contributions.

However, the new changes give employers the power to decide who is a contractor and employee with consequences if they get it wrong by HM Revenue and Customs (HMRC).

The fall in actual wages has forced drivers to leave the industry.

EU drivers are among those leaving the industry and the country after tax breaks are removed.

Driver David Foster said: “I work for a company that has lost at least 250 drivers due to the tax changes.

“If you are self-employed you earn £ 1,300 per week, when you are considered an employee you drop to £ 650-700 per week which is a massive reduction.

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A spokesperson for HMRC commented on the change, they said: “The non-wage work rules were designed to ensure that individuals pay similar levels of tax regardless of the structure in which they work. The April 2021 changes do not introduce any new liabilities. They ensure that the rules, in place since 2000, are applied as intended.

“HMRC has offered in-depth training and support to those implementing the changes, including tailored content to help the transportation and transportation industry comply. “

They added, “We have worked proactively with representative transportation industry bodies to understand their concerns and have offered additional support to help understand and implement the rules.

“We also worked with intergovernmental partners to deliver a non-salary webinar attended by over 40 industry representatives.

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