Complicated dealings with PAYE - advice needed please

KaelaH FMAAT, AAT Licensed Accountant Posts: 131 ? ? ?
I have a client that has asked me for advice regarding two of his contractors / employees
My client operates a courier service and manages 13 self employed owner drivers, up until now the model has worked and satisfied HMRC.
However, recently he has taken two of these drivers into the office & they have been assisting with the planning or routes and allocation of drivers etc. This means that they are working anything from 10-20 hours in the office per week as well as delivering their own routes as before. This seriously muddies the waters and they need to be on PAYE. This isn't a problem for either the employer or employers but we are struggling to work out the best way to do this.
If they go onto PAYE for all the hours worked there is the problem of their vans, they still own them, operate them as they used to, pay for their own insurance & fuel etc..
If we were to say invoice for courier work as self employed and be paid for their hours in the office under PAYE I am worried that the two areas are still too linked as they are doing both for the same employer.

Does this make any sense? and does anybody have an idea of the best way to resolve this from an employment point of view?


  • jamesm96
    jamesm96 Registered Posts: 523
    I'd have said there's a good case for your latter suggestion - invoicing for the work they carry out which is self-employed, but be treated as employees for their office work. Best thing to do would be to phone the PAYE office, ask to speak to a technical advisor with a query you have on employment status (that should usually get you through to a PAYE inspector) and then you can get an opinion straight from the horse's mouth, but in advance of the activities, rather than retrospectively in an inspection.
  • flashyflibble
    flashyflibble Registered Posts: 1
    If you follow James' suggestion could you update on their suggestions as I'm intrigued by the outcome. My first thought was that they couldn't be an employee AND self employed for the company as the services were too closely linked as you say but it's an unusual situation for sure.
  • Jawz
    Jawz Registered Posts: 53 Regular contributor ⭐ ? ⭐
    From my humble point of view, I'd have to agree with @jamesm96. The way I see it is that, these guys are working with your client in two separate capacities and you've clearly stated HMRC are happy with the current situation, i.e the guys working as self employed delivery drivers (capacity one) So no problem there.

    In capacity 2, two of he guys are hired to also work in the office as admin staff and therefore in my view, should be treated as PAYE staff in this capacity.

    I know, they are the same people that work for/with the same company and therefore very closely linked but I do believe, you have a good case to argue with HMRC on behalf your client. Keep us posted with the outcome and best of luck!
  • KaelaH
    KaelaH FMAAT, AAT Licensed Accountant Posts: 131 ? ? ?
    My client took advice from a HR specialist. The advice taken was that they were to employ them under PAYE & pay the standard mileage rate for use of the vehicles. Sounds simpler than I thought it would but I guess providing both parties are happy with the pay rate then its the best solution. Thanks for your thoughts on this.
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