Checking Validity of a UTR number

Keyser666777

Hi all wonder if anyone can help

I started a new (my first) small business early this year and have 6 permanent employees.  Unlike most businesses the Covid19 pandemic and subsequent lockdown has had a positive impact for my business.  

As a result I need to employ 4-5 people as delivery drivers for me as a temporary measure.  I am reluctant to employ them on a permanent PAYE basis as these are uncertain times and depending on the aftermath of and when the lockdown occurs and how it does I don’t know if orders will go down or what ? So may no longer require the new staff as it maybe be financially unviable.

i am therefore looking to employ self employed people.  My issue is I don’t HMRC lumping me with their tax and NI obligations.  So I am going to ask them for their UTR numbers as proof of self employment to demonstrate due diligence if I am lumbered with the tax and NI.  I mean anyone can just simply say to me they are self employed and tax registered?  

So my overall question is when provided with their UTR number is there any way I can check the validity of it with HMRC? A tool perhaps like you can do with the VAT tool checker?

My business is not in construction by the way so CIS requirements don’t apply here

thanks for your help

TELLIT01

A quick search on "checking UTR number" comes up with this.  You should verify all your subcontractors online using the HMRC CIS online service where possible. This will update the information held on the subcontractors' records within the service. In certain cases, you might need to verify one or more subcontractors by telephone through the CIS Helpline.

I know you say you aren't construction but phoning the Helpline may be a first step.

General_Grant

Keyser666777 said:

Hi all wonder if anyone can help

I started a new (my first) small business early this year and have 6 permanent employees.  Unlike most businesses the Covid19 pandemic and subsequent lockdown has had a positive impact for my business.  

As a result I need to employ 4-5 people as delivery drivers for me as a temporary measure.  I am reluctant to employ them on a permanent PAYE basis as these are uncertain times and depending on the aftermath of and when the lockdown occurs and how it does I don’t know if orders will go down or what ? So may no longer require the new staff as it maybe be financially unviable.

i am therefore looking to employ self employed people.  My issue is I don’t HMRC lumping me with their tax and NI obligations.  So I am going to ask them for their UTR numbers as proof of self employment to demonstrate due diligence if I am lumbered with the tax and NI.  I mean anyone can just simply say to me they are self employed and tax registered?  

So my overall question is when provided with their UTR number is there any way I can check the validity of it with HMRC? A tool perhaps like you can do with the VAT tool checker?

My business is not in construction by the way so CIS requirements don’t apply here

thanks for your help

Delivery drivers - whose vehicles will they be driving?
No employment is really "permanent".  In the first two years (and surely Covid-19 will be controlled by early 2022) you would only need to give them one week's notice - and you could offer zero hours till then if you wanted, and they were willing to accept employment on that basis.

Masomnia

The problem you have is that if HMRC/an employment tribunal take an interest they will look at the facts of the relationship between you and the drivers to assess if they're genuinely self-employed. Checking that they have a UTR number is probably good practice but it's not much of a defence if they start demanding employment rights and you've been treating them like employees.

It's really common for delivery drivers to be self employed so you shouldn't have too much of a problem if you're careful.

Marcon

A UTR won't give you any sort of proof they are self employed. It will simply confirm that they have at some point completed a self assessment tax return.

Nothing to stop you employing them on a PAYE basis. Be straight with them about the fact their employment may not last and make sure you are comfortable with any minimum number of hours per week you contract them for, and also the period of notice you are required to give them.

Savvy_Sue

I'd agree that zero hours contracts would be the way to go. You can pay a lower hourly rate than you'd need to offer to attract true self-employed drivers, and you can respond to changing needs. Although you can't lump holiday pay into the hourly rate, you CAN calculate it and pay whatever has been earned as a separate item each pay period. 

comeandgo

My husband and I both have UTR numbers.  We are not self employed.  I honestly think you taking them on as PAYE would give you more control over them as employer employee relationship especially if a new business.  

MinuteNoodles

HMRC ISSUED GUIDANCE IN REGARDS TO SELF EMPLOYED HGV DRIVERS WHICH THEY RE-ITERATED LAST YEAR. It applies equally to van drivers. Here's a link to the letter sent to the Road Haulage Association (registration required).

From the RHA Factsheet:
A driver is not self-employed if they personally work under the control of their “engager” and do not run the normal risks of having a business themselves.

And even then....

The owner-driver has to demonstrate a degree of control over the vehicle’s use, and, for example, must be entitled to provide another driver as a substitute for himself if he wishes.

The guidance was that as far as HMRC was concerned unless the driver had a financial interest in the running costs of the vehicle, in other words unless they actually owned the vehicle, they were unlikely to be regarded as self employed by HMRC. This applied to both sole traders and drivers who set up as a Ltd company. 

  I mean anyone can just simply say to me they are self employed and tax registered? . 

That's no different to you simply saying that someone is classed as self employed and not an employee just to make things easier for you. If they're going to have a manager or supervisor, you're telling them when to work, how to do the job and they're not able to send someone in to do the work instead of themselves they're not really self employed are they? And should HMRC come investigating that's the conclusion they'll come to too and then send you a bill for all that employers NI you've evaded.
There is nothing preventing you from taking them on as an employee and laying them off at any point for no reason in the first two years owing nothing more than any unpaid leave.