Business minister Margot James has called on HMRC to investigate the employment practices and tax affairs of delivery business Hermes, after a report suggested many of its drivers were employed off-payroll and received less than the national living wage
James was responding to a report by Labour MP Frank Field, which detailed complaints from 78 current and former Hermes couriers.
Field’s report, Wild West Workplace claims Hermes treats drivers as self-employed, meaning many of them a paid an hourly rate that falls below the national living wage and sees them escape employer’s national insurance and pension contributions.
‘What this report to the prime minister suggests is that “freedom” and “flexibility” of self-employment appear to be interpreted differently on either side of the employment relationship and that, as this report details, the enforcing of self-employment on staff is an abuse of known employment and taxation practices,’ the report said.
‘Hermes… appears to pick up all the advantages of self-employment while treating the workforce as being in its employment,’ it adds.
Several drivers told Field’s report that their monthly earnings, after petrol costs, were less than £6.80 an hour, 40p an hour below the living wage, and falling £3 below the £9.80 Hermes says its drivers receive on average.
Despite the push for an HMRC investigation, James confirmed to Field that the government does not intend to launch its own investigation into Hermes.
The business minister said: ‘However, we will continue to monitor the situation and I will pass your letter to HMRC, who can consider the relative merits of proactive investigation, even in the absence of a complaint, alongside other investigative priorities.’
Field said: ‘This is the first practical move the prime minister has made to begin implementing the promise she made on entering Downing Street; that there will be no-one left behind in this country. Woe betide those employers who think they can beat government moves to guarantee a decent minimum for everyone.’
An HMRC spokesman said: 'HMRC follows up every complaint of minimum wage abuse. When the wrong tax is paid, or the National Minimum Wage should have been paid, but hasn't, we intervene to ensure businesses play by the rules.'
Hermes has yet to respond to a request for comment.
