Here is the latest news from the Ring office.

View the June 07 newsletter on screen pdf of newsletter

Livestock Transportation - Driver Competency test

ARE YOU A COMPETENT DRIVER?

Anyone involved in moving livestock by road should be aware that new European derived rules are being introduced from January.  This includes farmers hauling their own stock and professional hauliers.

From 5th January 2008 transporters of livestock on a journey of over 65km (40 miles) will need to hold a Certificate of Competence issued by an independent body.  It is important to note that the 65km (40 miles) is the actual distance travelled and not distance as the crow flies. The Certificate of Competence is like a driving licence, and is valid for life.

The Certificate of Competence for journeys of over 65km (40 miles) and under 8 hours can be obtained by sitting and passing a multiple choice test.  Those drivers hauling livestock on a journey of over 8 hours are required to take the Long Journey Test.  For this, in addition to a multiple choice test, there is a practical assessment of their competence which includes driving and animal handling skills.

SFQC, based at Ingliston, Edinburgh has been authorised by the Scottish Government to conduct testing process.  Drivers registering with SFQC and successfully completing the test will be awarded the Certificate of Competence.

Give Gordon at the Machinery Ring office a call to obtain further information. back

New “Labour Only” procedures

In 1994, the then Inland Revenue, entered into a procedural Code of Practice (COP) with SMRA, which we believe has served both sides well.  Over the last 18 months a specialist team from HMRC’s National Labour Provider Team have reviewed the COP and come to the conclusion that it should be scrapped, as tax legislation and tax practice have been introduced which deals with all of the circumstances covered in the COP.  SMRA has fought hard on your behalf to retain the COP, as it believes it represents a common sense way forward and provides an easily audited system for HMRC.  It is with regret that HMRC will not budge and, unilaterally, they have withdrawn the COP with effect from 1 October 2007.

From 1 October 2007 the protection afforded to Demanders and Suppliers by the COP will be withdrawn and Ring members are requested by HMRC to make reference to the www.hmrc.gov.uk website and, more particularly, www.hmrc.gov.uk/employment-status, where they believe proper guidance will be given.

Suffice to say SMRA does not believe its members will best be served by these websites, however, it has no option but to reluctantly agree on the way forward.

Please let it be clear, this is not the end of all self-employed labour transactions between members as there are situations where the contract between the Demander and the Supplier will be a self-employed situation that would be accepted by HMRC.

It should also be pointed out that HMRC offices will continue to issue Tax Reference Numbers to Suppliers who apply for self-employed status, however, that does not, in itself, give that Supplier the right to be self-employed in every engagement he takes on.

The rules which Demanders, in particular, need to pay close attention, and Suppliers, where status is in doubt, need to follow are not easy, however, they do need to be followed, failing, the costs of getting it wrong, in tax and NIC terms, could be significant.  We should remind you that Rings are not Employment Agencies but the means of joining together Demanders and Suppliers.  It is what is transacted between Demander and Supplier that will be of interest to HMRC, particularly where the supply is “labour only”.  HMRC will try hard to prove, in these labour only circumstances, that the Supplier is an employee of the Demander and that proper PAYE/NIC accounting procedures should apply.  Demanders have a statutory duty to ensure they comply.

Attached is a fact sheet setting-out, procedurally, the process Demanders need to follow to determine whether labour only suppliers are to be treated as employees of the Demander or self-employed in their own right.  The checklist is not exhaustive and should not be relied upon absolutely, such that if you have concerns over the status of labour only suppliers you should take this up with HMRC. Rings are not in a position to determine status questions and HMRC have gone to considerable lengths to state that their systems tools will be capable of confirming status, provided the correct information is input by the enquirer.

Employed or self-employed?

A worker’s employment status, that is whether they are employed or self-employed, is not a matter of choice.  Whether someone is employed or self-employed depends upon the terms and conditions of the relevant engagement.  The tax and national insurance contributions (NICs) rules do, however, contain some special rules that apply to certain categories of worker in certain circumstances. 

If you work for someone else, it is important to know whether you are working for that person in an employed capacity or in a self-employed capacity as an independent contractor.  If you are an engager (Demander), it is your responsibility to correctly determine the employment status of your workers.
                                                                         
A worker’s (supplier) employment status will determine the charge to tax on income from that employment or self-employment.  It will also determine the class of NICs, which are to be paid.

In order to answer the “employed or self-employed” question, it is necessary to determine whether the person works under a contract of service (employees) or under a contract for services (self-employed, independent contractor).  For tax and NIC purposes, there is no statutory definition of a contract of service or of a contract for services.  What the parties call their relationship, or what they consider it to be, is not conclusive.  It is the reality of the relationship that matters.

In order to determine the nature of a contract, it is necessary to apply common law principles.  The courts have, over the years, laid down some factors and tests that are relevant, which is included in the overview below.
___________________________________________________________________________

As a general guide as to whether a worker is an employee or self-employed; if the answer is ‘Yes’ to most of the following questions, then the worker is probably an employee:

 

If the answer is ‘Yes’ to most of the following questions, it will usually mean that the worker is self-employed:

___________________________________________________________________________

Where a Demander cannot satisfy himself that the contract or the Supplier they are to contract with amounts to self-employed status, PAYE/NIC must be implemented.
 
Where a Supplier is doubtful of his status when carrying out certain jobs, he too should also make sure that he is paid through PAYE by the Demander he is working for.

The alternative for Demanders in labour-only supply situations is to engage labour via Total Labour Solutions on 01620 850705.  Similarly, for a Supplier whose status is constantly under scrutiny, he might consider signing-up with T.L.S. (Lothian Machinery Ring Member).back

Communication
The Lothian Machinery Ring Ltd & LMR Training Services Ltd office is normally manned from around 7 am Monday to Saturday. Preferably, please phone between 7 am and 5 pm weekdays. If the office is unmanned, the phone will be on divert to the mobile (which is normally switched on until around 9 pm / 7 days). If, for any reason, it transfers to the answering service, please leave a message and we will contact you ASAP. Alternatively you could e-mail us at the   (Could all members with e-mail addresses please forward them to us, if you haven’t already done so, as this is proving to be a quick and inexpensive means of communication).  back

Membership
Current membership of Lothian Machinery Ring stands at around 270 with an annual work turnover of around £2.2 million.  back

Guide Prices Phone the office or use the info request. back

Fuel Supply
We have six fuel supplier members who keep us updated, on a daily basis, with their keenest prices. We have ordered around 4.3 million litres of fuel between 01/06/006-31/05/07 on behalf of Lothian Machinery Ring members.  
PLEASE GIVE US A CALL THE NEXT TIME YOU ARE ORDERING FUEL!   back

L.M.R.Training Services can arrange many courses to suit members demands. link to LMR Training Services website    back

Directors