An HMRC investigation into Hermes’ use of self-employed couriers could have implications for the entire parcels sector, according to an industry expert.

The carrier is facing the threat of investigation after a series of articles by the Guardian newspaper, and later a report from Frank Field MP, claimed it was mistreating its couriers and paying some below the national living wage.

This led to business minister Margot James referring the issue to HMRC earlier this month, although it is yet to confirm whether it will conduct an investigation.

Parcels market analyst Frank Proud from Apex Insight said that if an investigation goes ahead and Hermes is forced to make changes, it could set a benchmark for other couriers.

He told MT: “The investigation is only around Hermes, but we have to wonder if it’s for standards across the market, and whether others would have to match that.

“If it’s found Hermes needs to increase holiday pay or meet a guaranteed minimum, for example, you’d think that everyone else would have to

match that, or that HMRC might have to look at others.”

Proud added that he thought a potential tightening of regulation for Hermes may be welcomed by those in the sector.

“There will be some people in the industry who are competing against Hermes and finding it difficult to do so because Hermes has such a low-cost delivery model.

“So depending on what HMRC decides, those people would be pleased to see Hermes add a little more cost into its model to reduce that advantage it has on the rest of the market.”

Earlier this month, Hermes chief executive Carole Woodhead admitted that the company had not been “as compassionate as it expected itself to be” in some cases, but that it had since introduced measures to combat this.

These measures, she said, included a new code of conduct, an internal panel for complaints from couriers and an external ombudsmen as a final recourse if people are still dissatisfied with their treatment.

Woodhead said: “We have committed to being bound by any decision it makes about a case, which I think is part of giving confidence externally

that our standards are good and that we treat people fairly.”

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