Thought Id start this one going because its rather dead on this board at the moment and I suppose all my usual muckers are either at the Stella tennis event watching Dim Tim (lose again) or at Henly Regatta eating cucumber sandwiches (they wish,...NOT).

Anyway please feel free to just talk to yourself blast away and let it go on any company or subject you wish. Just wish Id thought of this one before.

cheers GF.

Phil Valentine, a freelance who runs five vehicles for City Link in the Lake District, said he was owed about £21,000 for two and a half weeks’ work. During that time, he had incurred expenses including drivers’ wages and insurance for the vans plus a £3,000 fuel bill. He has been told he is unlikely to receive any of the money he is owed and will now have to seek new work and pay out as much as £1,200 per van to have them resprayed in the livery of any new employer.
http://www.theguardian.com/business/2014/dec/31/city-link-administrators-redundancy-notices

This is the risk of being self employed and working for just one person....

perhaps the Cl drivers can get a payday loan, now the gov has made them "fair"



Payday loan caps come into force


New regulations introduced by the FCA mean loans will now be capped at 0.8% a day, as over 1 million borrowers benefit





Well over a million people will see the cost of their borrowing fall now that new price caps on payday loans have taken effect.

However, early indications are that many of the sector’s bigger players will be charging the maximum amount allowed to under the new regime, rather taking the opportunity to set their fees below the cap.

Interest and fees on all high-cost short-term credit loans are now capped at 0.8% per day of the amount borrowed. If borrowers do not repay their loans on time, default charges must not exceed £15.

In addition, the total cost (fees, interest etc) is capped at 100% of the original sum, which means no borrower will ever pay back more than twice what they borrowed, said the Financial Conduct Authority (FCA), which has introduced the new rules.

Someone taking out a £100 loan for 30 days and paying it back on time will not pay more than £24 in fees and charges.



More good news here:http://www.theguardian.com/money/2015/jan/02/payday-loans-caps-fca

It took far too long for the FCA to act on pay day lenders, this should have been done years ago.

It's still usury..


However, it appears the new regime will not spell the end of the huge annualised interest rates quoted on payday loan websites. Despite the changes, Wonga is still able to charge a representative APR of 1,509%, while QuickQuid’s site was promoting an APR of 1,212%.

Fred : this not the 18th or 19th century.....insular was how Britain probably was (and the better for it in my private view)....this is the 21st century ....

Max - if CL don't own the vans, then there is no depreciation to be accounted ..... however, i suspect that the company that actually owns the vans will now be on for a pasting, for pretty obvious reasons

The Citilink redundancies are the workers working at the depots. The van drivers won't get any money owed as there are secured bank loans that will be paid out first and there is not even enough left to pay them. The workers will not get their redundancy money either from the company. That will be paid by us out of the public purse under a scheme that pays redundancy if a company cannot pay it. It will be the statutory minimum.

as the drivers are deemed to be self-employed, i cannot see any way in which they are covered by the gov't redundancy scheme either

technically if your 'self-employed' you can't lose your job, you could lose a contract or a client but ultimately you are responsible for providing your own employment.

RF,

You are right, but it seems many wish it the economic principles could return to your chosen periods.

To do so would be retrogressive for all if it did so. Some maybe cushioned to a small degree from doing so. A pretty bleak outlook of retreat rather attempting to resolve the problems.

Each to their own.

The drivers are/were self-employed.

This is all about the definition of 'What is an Employee?'
and also
What is the definition which classifies someone as being 'Self Employed'?

- or allows them to be self employed and therefore prevents the firm they are working for from needing to collect Income Tax (PAYE) and National Insurance from such workers and also pay Employers Liability for National Insurance to HMRC?

Self employed workers are not entitled to redundancy. Neither are they entitled to unemployment benefit.

Thus the whole City Link arrangement was of great benefit to the government because:

1. It lowered the unemployment statistics. ie. Once the drivers became 'self employed' working for City Link that meant that the drivers were no longer unemployed.
2. Now that the drivers are out of a job the government does not have to pay them unemployment benefit.
3. It seems to me, that the City Link driver contracts, particularly the bits where drivers had to do 'this, that or the other' for City Link, eg. turn up for work, drive a City Link liveried vehicle, or pay a fine if they didn't do what City link insisted they do, actually qualified them to be properly classed as 'employees' of City Link and not self employed subcontractors.
4. Having self employed sdrivers also benefited City Link because it saved CL from having to buy vans and fuel and pay Employers Liability for National Insurance on those workers.

Importantly, the goverment is assisting HMRC to be complicit with what is surely an illegal arrangement as described in 3. above.

Why?

A. Well importantly, it helped the unemployment statistics.
B. Self employed people still pay Tax and NI.
C. Now that the City Link driver-workers are back on the dole, the unemployment statistics are not worsened in any way. They might have lost their driving contract but they are still technically self-employed.
D. The goverment do not have to pay out unemployment benefit to them.

And the illegality?

Wrongly categorising workers who, by the nature of their Contract for Services with a firm should more accurately be categorised as being employees of that firm and engaged under a Contract of Service.

Would any of you employed guys out there like to enjoy the cash flow benefit of not having to pay any Income Tax for at least 1 year? It will take around 1 year of trading to ascertain what your self employed profits might be. If everyone was to function in a self employed capacity, then the government would draw any PAYE every week/month.

Well tough! The government won't let you do it!

So why did the government let the drivers of City Link function in a self employed capacity? That for me, is a BIG Question.

They will get unemployment benefits. It takes longer and they have to declare that they are not self employed anymore. However, most of the couriers will be applying to other courier companies for work. Mind you, this is probably one of the lowest activity times for couriers apart from returns.

EL - 54160 - you sound like the gobmeister :-)
CL are just one of a great many companies that insist that their "employees" are self-employed ..... and i agree it's an abuse in all sorts of ways

however, as these self-employed have to register with HMRC as such, it is a "one-horse racing certainty" that the contracts put out by CL (and all others) have been fully vetted and approved both by HMRC and the company's lawyers

though self-employed have to pay their own NIC, the gov't of course loses out by not receiving the employer's contribution .....
also, though as self-employed you do not get dole money, assuming other boxes are ticked you still qualify for other benefits such as housing etc

You will get dole if you cease to be self employed. The reason for no dole is that a genuinely self employed person will be running a business. There will be periods in that business when there are no customers and claims for unemployment benefit between customers would be somewhat odd.

Cynic

From HMRC:

ESM4210 - Particular occupations: lorry drivers - general
Drivers who only provide their labour, driving vehicles owned, maintained, and insured by contractors, are likely to be employees. Drivers who also provide the means of transport, that is the vehicle, are likely to be self-employed even if they work mainly for one principal. The vehicle may be one which they own or lease (see ESM4211).

City Link were obviously using this paragraph to determine the nature of the employment or self employment.

My concern is to do with:

The enforced livery of the vans: ie. City Link livery only.
The enforced usage of the liveried vans: ie. City Link deliveries only.

For me, it was the enforced use of these two stipulations by City Link, which facts were not fully disclosed and were obviously omitted from HMRC questioning, which allowed the firm to get away with using self employed drivers and thereby escape all the 'Employer' responsibilities of employer tax collection.

I also see the benefit to the government of allowing this type of 'employment' to occur:

It helps the unemployment figures.
It encourages people into self employment.

All this is good - until it goes wrong.

Then we find that Income Taxes and National Insurance can't be/haven't been collected.
The rest of us tax payers then have to pick up the tab for it.

In this instance, those at the top of the City Link tree, ie. 'the fat cats', make quite alot of dosh for themselves leaving others to pick up the bill.

This City Link failure is a sorta kinda 'civil crime' rather than a 'criminal crime'. This type of crime is what our society is persistently suffering from, eg. similar to, say what the bankers did to us in 2006/7/8/9.

Here's one of the latest 2014/2015 products to hit the market:

The 'Selfie Stick'

Phil Valentine, a contractor who has worked for City Link “on and off” for six years and runs six vans, dismissed the £43,000 figure. Once a driver paid for fuel, insurance and a weekly charge for a van, earnings would be more like £28,000 a year."

Surely if you use the above case Phil Valentine should be the employer as he owns the vans and other drivers are potentially working for him by driving them. Valentines contract would be to City Link. City Link would therefore not employ the other drivers..

It's not the only outfit to pull the plug around the New Year is it, get the Christmas revenue in to get some of the losses back... and then fold it.

Thinking about how this might have been...

Let's start with:

The drivers need liveried vans to be able to deliver for City Link.

Valentine merely assists the drivers to acquire the liveried vans.
This seems to be a prime qualifier for them to function in a self employed capacity and work for anyone in that capacity.

But providing a service for who? Valentine or City Link?

All Valentine has to do, say in return for his van aquisition help to these 5 drivers, is create a Contract for Services between himself and them, saying 'who' and 'how' has to do 'what' for 'whom'.. All he then has to do is have wording inside these contracts specifying that the vans can only be used for City Link deliveries.

He is then running 5 self employed City Link drivers and he himself is also self employed. All 6 vans only deliver for City Link. All 6 drivers are self employed. Valentine also makes a bit from his 5 drivers for financing their vans. Simples.

The important bit is the HMRC 'own van' paragraph. It is the bit that is being abused.

Hays is right Cynic if you become unemployed when self employed you are eligible to claim
Jobseekers Allowance (dole to you) there is a means test and you have to have been resident here for so many years.

But its a right farce having to take all your books down to the Job Centre. I had to do the assessments when I was there and what a pig of a job it was especially with some of these self employed bringing in boxes and boxes of invoices.

If I can find it ill post up what you have to prove.