With the imminent crackdown on bogus self-employed workers in logistics, operators are being urged to act now to avoid significant disruption to their businesses.

Despite the government’s announcement that it intends to review the proposed application of IR35 to the private sector, driver recruitment specialist Driver Require says operators should not to see this as a postponement or cancellation of the IR35 plans but for what it is: a review with no guaranteed outcome.

Financial secretary to the Treasury Jesse Norman said: “We recognise that concerns have been raised about the forthcoming reforms to the off-payroll working rules. The purpose of this consultation is to make sure that the implementation of these changes in April is as smooth as possible.”

To encourage hauliers to continue preparing for the IR35 legislation to roll out in April 2020, Driver Require has published an 'IR35 action plan' aimed at helping operators understand the steps they need to take to be ready for the changes.

The plan talks operators through seven steps of action including formally determining their company size (if they can be categorised as a “small company” they are exempt from the IR35 legislation) or if they need to work with their HR departments to prepare status determination statements (SDSs) for each category of agency workers that they engage. It also explains what’s involved in ensuring operators are prepared for the repeal of the Swedish derogation, and guidance around the negotiation of new charge rates between hauliers and their agencies. The Swedish derogation is a model of employment where an agency hires a worker directly, rather than being the middleman between a worker and a client company, to avoid some of the rules of the Agency Workers Regulations (AWR) 2010.

Driver Require CEO Kieran Smith explained: “For an operator to assume the roll out won’t happen will mean that they will be totally unprepared if it does go through, putting them at a great disadvantage to their competitors who do prepare for it.

“While we’re recommending that our customers prepare draft SDSs, we’re suggesting they delay publication of these pending the outcome of the review. This way they will be ready to act should the implementation of IR35 go ahead, while maintaining flexibility should it be delayed or changed.”

Driver Require’s action plan follows its recent white paper, 'IR35 and its potential impact on the temporary LGV driving sector'. This explains how IR35 is going to force agency drivers currently operating as limited company contractors to move to PAYE. Maintaining these drivers’ net pay — as well as maintaining agency margins, paying tax and NI contributions — will effectively raise agency labour costs by up to 25%, which will raise the cost of temporary drivers to the end client by around 20%.