Rising Prices

Agree. There are things the hauliers should have fixed, and things government / local government should have fixed.

 

We know that the IR35 regime was brought in to stop the practice of avoiding tax by the employee and NI for the employer. It was introduced in 1999 by Labour, 22 years ago, plenty of time for employers to work with over the years.

Personally, when I was in logistics we looked at employment whenever I could, rather than contracting, as I felt it provided a better working relationship, and I remember that was easier once the tax loophole for self employment was closed.

In my view, haulage businesses should provide the training free or at the very least as an interest free loan to be paid back via wages.

 

The unnecessary IR35 changes have created challenges across many industries

Try getting a PM, BA, DBA etc at the moment

Was it really a loop hole? Yes outside IR35 contractors paid less tax, but they also had to fund their own sick pay, holiday pay, pension contributions etc, and be on instant notice.

 

Ultimately, rightly or wrongly driving an HGV is seen as a relatively low skilled job. Footballers get paid obscene amount of money at the top level because there are only a finite amount of them that can perform to that standard. It would be in the capability of most people who can drive to pass an HGV test, if they really wanted to. So in the longer term pay might go up slightly for them, but I think people are living in cloud cuckoo land if they think there will be some seismic shift in conditions and attitudes towards lorry drivers. Lower skilled jobs will always be squeezed at every margin possible, that’s how huge corporations make money.

 

If there is a party out there who still believes the future is squeezing a section of society then they have learned nothing from Brexit, and deserve all they get

 

But look at things like teachers and nurses, you’d argue more skilled work than an HGV driver but it’s taking a pandemic for nurse to get any recognition at all. I’ve a friend whose wife has just left teaching as it’s just too stressful and low paid. She can get a private sector job that pays the same, granted the holidays aren’t as good but the work is much less stressful. Why are jobs like HGV drivers suddenly going to completely change? Large corporations will always squeeze margins where they can, as much as they can.

 

Most of the reasons given for the exodus of drivers are not pay related nor are they expensive to fix

Regarding low pay in the public sector, the whole thing needs a radical review imo on what is necessary what is affordable and how it might be funded, but that is a different topic

 

‘If’? Do you seriously think with rising prices that £20 of UC can be lost?

 

Well, we have just had our second kid and now very much want to move into a bigger place, as our flat only has two bedrooms, one of which is teeny tiny.

Went to a viewing on a house last weekend in the middle of nowhere, listed for 2.3m (SEK...), sold for 4.3m after bidding

Basically everything goes at least 30-40% over the asking price, which are already up at least 40% in 3 years.

If you want a bargain, best move to another country

 

It wasn't the perfect solution by any means, but if you asked any pre 1999 tax adviser or accountant how an employed tradesman can increase his income, he would usually say "go self employed and be paid as a contractor". But, I agree, in some cases, it was a false economy. IR35 removed that self-employed option for many.

The fact is, being self employed also opens up other opportunities to save tax legally and illegally, and that doesn't sit right with many, even if totally legal. Bringing in iR35 was a symptom of that "jealousy". Personally, I think the extra risk of going it alone morally earns a bit of leeway when it comes to the tax bill.

 

If you are legit self employed/or a contractor and not using it as a convenient tax/NI saving, then IR35 doesn't affect you.

 

I think it should be down to transport managers and their companies to finance and build lorry parks. I am not sure why it would be down to the government.

 

Agree. However planning and strategy is not within the powers of hauliers to solve.

 

Well it does really, because you can be genuinely self employed/or a contractor with any number of customers, but the IR35 regime treats a contractor with one customer differently (less beneficially) than if he has a few customers. So. it will affect a contractor with one customer.

Having said that, I say that from my experience 15 -20 years ago, it may be different now and happy to be corrected.

 

I disagree with that. If they knew they would have to rely more on British drivers, telegraphed to them in 2016, and didn't invest in better conditions/continued with the same poor conditions and wages, then they are to blame for their own woes, in my opinion.

If they took a gamble that a reduction in cheap labour would not occur, or would not effect the number of drivers available, it can only be said they lost.

 

Yeah, contractors with one customer, ie. Tax fiddlers.

 

Disagree all you like, but Local Gov Planning decides what is built where

Like many things, this will only be solved through public-private collaboration

 

It isn't fiddling. A contractor has to pay his own sick-pay, his own pension contributions. his holiday pay, etc. It is a perfectly legal and encouraged method of working and it offers more freedom over stuff like hours, usually.

Anybody that pays into a pension and takes tax relief saves tax, that isn't much different.

 

It clearly isn't encouraged, hence IR35. If they can prove that there are legitimate reasons for them to be off payroll, then they can carry on.

 

It is not, imo, whether IR35 is fair or unfair or efficient or inefficient. It has been cited by many haulage companies as one of the major reasons why HGV drivers have left the industry.

It has been an unintended by product of government policy that has made an already bad situation worse. Not for the first time has something that looks good in theory ended up causing more problems than it has solved.

It is, imo, an area that the government should revisit in order to make being a HGV driver a more attractive proposition.

 

The issue was the introduction of the HMRC definition 'if you look like an employee (i.e. you work for just one customer) you are taxed as if you are an employee regardless

It was called out as a stupid move at the time, incorrectly and rather insultingly assumed everyone who was contracting was on the fiddle, and has been proven to have created far more trouble than it ever sorted

 

I don't see that you can just do it for HGV drivers, are you proposing it is scrapped across the board, and allow tax mitigation?

 

Yes, scrapping the legislation could be a possible outcome.

But I also don't see why HGV drivers couldn't be exempted if that is deemed to be the best approach.

I just think that, as it has been identified by haulage industry itself as one of the leading causes of the shortages, the government need to revisit the legislation.

Whether that results in it being scrapped, sector exemptions or the rewording of the legislation to make it less damaging is down to the government and their advisors.

It is certainly a false economy if a legislation that is supposed reduce tax mitigation causes shortages of labour, resulting in massive economic impacts, that ultimately reduce overall tax revenue!

 

Maybe, but the fact that the haulage business blame IR35 doesn't mean it is true to the extent that scrapping it is a game changer. I needs to be looked at first.

They could be trying to pass the buck and attempting to get the taxpayer to help fund their drivers (via lower taxes), instead of themselves - they have a vested interest in doing that.

 

I agree. But the haulage industry have been saying for decades that there is a problem getting and retaining drivers.

Covid and Brexit, in particular, have dramatically brought these shortages to the fore and nobody can now deny it's not an issue.

It would be foolish now not to listen to the haulage companies and the drivers to find out why being a HGV driver is no longer appealing to existing and new drivers.

Perhaps IR35 is not the game changer that the industry claims it is. But I think the government are duty bound to listen to those on the front line and see what can be done to fix the issues that are within their powers to do so.

And, as I say, if IR35 is putting off drivers from staying in the industry then the cost to the tax payer could be far greater than any tax mitigation individuals might make.

As you well know, when tax becomes to burdensome it can stifle growth and ends up costing more than it raises.

 

Not sure if this has been posted on here before but it confirms that IR35 is one of the factors that the haulage industry cites as being a cause of the driver shortage:



I think the other big thing that has been ignored for too long is the aging demographic of HGV drivers. It's just not been attractive to young people and I think that is partly due to the £4k (up to 7k) cost of qualifying.

Drivers are retiring and there are just not enough youngster taking their place. I think a short term financial incentive, such as loans or grants for training, would be a good start imho.

 

I would have given that table more credibility if they didn't blame everyone else except for themselves. Do they not know that drivers get older and retire?

If training costs too much, many of the haulage companies or massive retailers and fuel suppliers could provide the training as an interest free loan to repaid over, say 3 years.

And surely, the drivers could be offered an employed position rather than as a contractor on IR 35.

Every company should understand that if they can't recruit or retain staff, they have a problem that needs to be sorted. If this shortage has been going on for years as you say, then they should have been tackling it, rather than wait for something like covid or brexit (with about 2 years warning) to tip them over the edge.

 

Disagree all you like, please. That's the point of this forum.

But if private business makes no move to develope or invest, local authorities cannot do a thing about it.

 

Such a survey should be given full consideration. But it also must be remembered that the hauliers were fiercely Remain. Asking them their opinion will, most certainly, reflect that.

A survey of the drivers themselves would seem a far more reliable sorce.

For instance, none of the hauliers appear to have mentioned conditions, which appeared to be, in Moose's posting of the driver's story, the major factor. Hauliers are unlikely to highlight that the conditions they have created for drivers are a reason for people leaving, particularly when there is a political point they can make that would also place the blame elsewhere.

 

I'm sceptical that's got much to do with it. You can earn that money pretty easily as a young person starting out with no responsibilities, which is basically the demographic we're talking about here (i.e. didn't go to uni, right out of school, still living at home while they get on their feet).

Granted, that won't be possible for EVERY young person, but certainly possible for enough that if they really wanted to do it, it wouldn't have been a barrier. I took a year out before uni to work full time, and I could easily have financed that training for myself if I had wanted to. And that's before considering the money I earned working part time between 13 and 18.

Not that I think making it easier to get into trades/trades adjacent careers is a bad thing, of course. It isn't. I suspect a lot of the disinterest comes down to schools; trades were literally never even presented as an option at my school. It was uni, uni, uni, uni and more uni. I think the reality, however, is that most of us don't need to go to uni at all, and we need to take a good long look at why we're saddling so many young adults with sizeable debt for a degree that most will probably never need or use.

 

As I've already said, government, the public and hauliers are all partly responsible for the current issues.

Haulage companies certainly could have done more to deal with the aging demographic of drivers. But IR35 allegedly reduced drivers income by about 25% overnight. That is a massive shock to the industry.

As you said earlier, there is a temptation to shift blame. But that doesn't address the immediate problem.

I think the government needs to look at giving the same support to vocational training that it does to academic qualifications. It needs to rethink IR35. It needs to expand the EU visa scheme to be longer and more generous - 3 months (from last Friday) for 5500 is just not good enough imho.

And yes, haulage companies need to look at how they can improve working conditions for drivers, encourage youngsters to join the industry and work with local and central government to provide facilities for drivers

 

Yes, I agree. If you really want it then you will find a way.

But why should a youngster be offered the opportunity of going to Uni with only the possibility of paying an interest free loan in the future or stumping up £4k minimum for vocational training.

It's a particularly mad scenario when so many of the degrees on offer are of little value to the economy but the nation is crying out for certain trades like HGV drivers.

I just think it should be at least a level playing field where vocational training gets the same support as academic qualifications.

 

Yeah, I did photography at Uni, just got swept along and ended up doing it because it was my best A Level. Total waste of time and something I’ve never used in any way. Like many I would’ve been better off just getting a job after college but was virtually pushed into going to Uni.

 

Yes, it should definitely be easier to get into trades, I agree. It benefits the country to invest in people. My point is more that I doubt that lack of ability to pay fore the training would be responsible for the lack of current drivers.

My wife subsidizes our employees who need training. It carries a similar cost, and it makes sense due to the dearth of local talent with the skills. We pay for it, they work a slightly reduced rate until 50% is paid off, and if they leave before paying it off they owe the balance of their 50%. Works out well for both parties. Sometimes we've even paid for the whole thing as long as they commit to two years with us (they pay it back if they leave early).

If the haulage companies knew paying for the training was an issue they could easily have set up something similar. It's not difficult, and it's even sensible if there's a talent squeeze in your area. Beats not having people to do the work!

 

Same, except I studied Law. I'm now in IT.

I'd have been far better off doing IT courses (and by that I do NOT mean a degree) and hands-on vocational training than spending 3 years on at uni. But from the time I arrived at secondary school the focus was on going to uni, getting the grades, working out what you were going to study.

At the time it was presented as literally the only path if you wanted to avoid being a jobless failure. So off we go, and incur a bunch of debt on something we'll never use...