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Delivery giant Hermes faces HMRC inquiry into low pay allegations Delivery giant Hermes faces HMRC inquiry into low pay allegations
(35 minutes later)
The UK’s chief taxman has referred Hermes, the parcel delivery giant, to HM Revenue and Customs compliance officers following complaints by couriers that they are being paid below the minimum wage and are wrongly classed as self-employed.The UK’s chief taxman has referred Hermes, the parcel delivery giant, to HM Revenue and Customs compliance officers following complaints by couriers that they are being paid below the minimum wage and are wrongly classed as self-employed.
The move follows a Guardian investigation that revealed some self-employed couriers for the firm that delivers for John Lewis and Next were earning below the national living wage.The move follows a Guardian investigation that revealed some self-employed couriers for the firm that delivers for John Lewis and Next were earning below the national living wage.
Some 78 couriers subsequently made complaints to Frank Field , the chairman of the House of Commons work and pensions select committee.Some 78 couriers subsequently made complaints to Frank Field , the chairman of the House of Commons work and pensions select committee.
They set out how their self-employment meant they received no paid holidays or sick pay. They also said they risked losing work if they were unable to do their rounds because of ill-health or for other reasons. Twenty more also claimed they should be considered employees rather than self-employed.They set out how their self-employment meant they received no paid holidays or sick pay. They also said they risked losing work if they were unable to do their rounds because of ill-health or for other reasons. Twenty more also claimed they should be considered employees rather than self-employed.
Hermes said HMRC had confirmed in 2011 it was right to class its couriers as self-employed and said it is “committed to ensuring that our couriers receive earnings that are equivalent or higher than the national living wage”.Hermes said HMRC had confirmed in 2011 it was right to class its couriers as self-employed and said it is “committed to ensuring that our couriers receive earnings that are equivalent or higher than the national living wage”.
Sir Edward Troop, HMRC’s executive chairman, on Thursday told Field that he had passed around 100 reports from Hermes workers to “the appropriate compliance teams for consideration”. Edward Troup, HMRC’s executive chairman, on Thursday told Field that he had passed around 100 reports from Hermes workers to “the appropriate compliance teams for consideration”.
He said: “If we find that companies have misclassified individuals as self-employed, we will take all necessary steps to make sure they pay the appropriate tax, national insurance contributions, interest and penalties.”He said: “If we find that companies have misclassified individuals as self-employed, we will take all necessary steps to make sure they pay the appropriate tax, national insurance contributions, interest and penalties.”
Troop made clear that he could not comment on individual cases, but said: “Individuals cannot be opted out of employment rights and protections, simply by calling them ‘self employed’. We are committed to tackling false self-employment.” Troup made clear that he could not comment on individual cases, but said: “Individuals cannot be opted out of employment rights and protections, simply by calling them ‘self employed’. We are committed to tackling false self-employment.”
In a parallel move, Jane Ellison, the financial secretary to the Treasury, said HMRC was also setting up a new “employment status and intermediaries” team and is “transforming its compliance approach” on issues including false self-employment.In a parallel move, Jane Ellison, the financial secretary to the Treasury, said HMRC was also setting up a new “employment status and intermediaries” team and is “transforming its compliance approach” on issues including false self-employment.
She said: “The government takes false self-employment very seriously and is committed to taking strong action where companies, to reduce their costs, force their staff down routes which deny them the employment rights and benefits they are entitled to.”She said: “The government takes false self-employment very seriously and is committed to taking strong action where companies, to reduce their costs, force their staff down routes which deny them the employment rights and benefits they are entitled to.”
Field said: “Clearly the government is girding its loins for a serious fightback against those companies trying to wriggle out of their obligation to pay the minimum wage by enforcing ‘self-employment’ on their workers.Field said: “Clearly the government is girding its loins for a serious fightback against those companies trying to wriggle out of their obligation to pay the minimum wage by enforcing ‘self-employment’ on their workers.
“The prime minister has set companies the task of delivering a decent minimum for their workers, and companies now know they will be caught out if they jeopardise this effort.”“The prime minister has set companies the task of delivering a decent minimum for their workers, and companies now know they will be caught out if they jeopardise this effort.”