Using “LTD Drivers” – Licence Lending and Unlawful Operation

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Using “LTD Drivers” – Licence Lending and Unlawful Operation

The recent decision from Traffic Commissioner, Kevin Rooney, in the case of Quick Road Transport Ltd, brings the issue of how operators engage drivers to the fore of the operator licensing arena yet again (Read the full details of the Traffic Commissioner’s decision here).

In this case, all bar one of the company’s drivers were engaged through a limited company – often referred to as “LTD drivers”.

The Traffic Commissioner determined that the use of “LTD drivers” constituted lending of the company’s Operator’s Licence to each of the “LTD drivers”. Consequently, the Operator’s Licence was revoked. The Traffic Commissioner also warned of the risk of vehicles operated in such circumstances being impounded by the DVSA.

In reaching his decision, the Traffic Commissioner explained that the drivers of the vehicles were in fact a servant of their own limited company (despite them being the only employee and sole director of that company). They were not the servant or agent of Quick Road Transport Ltd (which is what the operator licensing regime requires). Quick Road Transport Ltd effectively sub-contracted its haulage work to a number of these limited companies to be carried out by their driver(s), which meant that each of the “LTD drivers” should hold their own Operator’s Licence. In the absence of an Operator’s Licence, the “LTD drivers” use of the vehicles was unlawful.

This approach stems from HMRC concerns that HGV operators were wrongly treating drivers as self-employed or hiring drivers through their own limited companies (as was the case here) in ways that did not comply with tax laws. Subsequent guidance stated that it is rare for a commercial vehicle driver to be genuinely self-employed unless they are an owner-driver (and therefore have their own Operator’s Licence) and this has been the approach of the Traffic Commissioners for some time where they encounter issues relating to driver engagement.

This case therefore serves as a timely reminder for operators of the need to review the way in which they engage their drivers and satisfy themselves that those arrangements are legitimate. 

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JMW’s Commercial Road Transport team have extensive experience in matters relating to operator licensing and advising operators on the approach the Traffic Commissioners take in relation to driver engagement. Contact the team for a FREE initial consultation without obligation by calling 0345 872 6666 or by completing our online enquiry form.

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