Revenue and Dominos pizza.

Bikerman2019

I read an interesting article this week about dominoes pizza misclassifying drivers as self employed.
https://www.breakingnews.ie/business/dominos-pizza-drivers-must-be-treated-as-paye-workers-court-rules-971644.html

How would you regularise a situation like this?

Are there any previous instances like this that show the expected next step in this situation . Would Revenue now attempt to trace all "self employed" drivers, or would they set the clock to now and demand Dominoes set up a new system, or would they just say to the company, "we told you this in 2011, so now you owe us 9 years payments" and also, on an ongoing basis, am I right in thinking if they are now, as employess, they are now entitled to holiday pay, PAYE and all the rest.

From reading that article, it appears they have been caught out avoiding statutory deductions and now have been called to heel. It dates back to 2011, then a failed appeal in 2018 and now confirmation by the high court in 2019.

thegolfer

Treat the net payments to the delivery drivers as net of tax, say an average tax rate of 30%. Gross up to 100% and work out the 30%tax. Additionally not forgetting holiday pay and other taxable entitlements such as potential BIK etc.

Next apply employers prsi at 10.75% and then apply interest and penalty for 9 years on the PAYE and PRSI due to Revenue.

There would be a tax deduction available to the company at 12.5% excluding Revenue interest.

All adds up to a hefty bil at the end of the day.

Bikerman2019

thegolfer wrote: »

Treat the net payments to the delivery drivers as net of tax, say an average tax rate of 30%. Gross up to 100% and work out the 30%tax. Additionally not forgetting holiday pay and other taxable entitlements such as potential BIK etc.

Next apply employers prsi at 10.75% and then apply interest and penalty for 9 years on the PAYE and PRSI due to Revenue.

There would be a tax deduction available to the company at 12.5% excluding Revenue interest.

All adds up to a hefty bil at the end of the day.

That is very interesting. So, on the basis this started back in 2011, I take it Revenue will now be demanding 9 years money. Would they go to the hassle of trying to trace all those drivers, or take the attitude "we told Dominoes 9 years ago this was due, and they argued and delayed it, so now Dominoes has to pay it"


I imagine this will have serious ramifications for any company trying to classify their staff as self employed.

thegolfer

Bikerman2019 wrote: »

That is very interesting. So, on the basis this started back in 2011, I take it Revenue will now be demanding 9 years money. Would they go to the hassle of trying to trace all those drivers, or take the attitude "we told Dominoes 9 years ago this was due, and they argued and delayed it, so now Dominoes has to pay it"


I imagine this will have serious ramifications for any company trying to classify their staff as self employed.

Domino's are the employer, this obliged to account for all PAYE deductions.

If they cannot trace all employees, then a best estimate approach is applied for a tax liability.

Other industries will be watching very closely, however there may be specific circumstances in this case which set it apart from other similar businesses.

martingriff

Should be noted that this is about a company that has a Dominos franchise and not Dominos. But I be guessing that Revenue would demand all info from the company and would do an audit to get as close as possible to the exact tax and then penalties

MrMusician18

Bikerman2019 wrote: »

That is very interesting. So, on the basis this started back in 2011, I take it Revenue will now be demanding 9 years money. Would they go to the hassle of trying to trace all those drivers, or take the attitude "we told Dominoes 9 years ago this was due, and they argued and delayed it, so now Dominoes has to pay it"


I imagine this will have serious ramifications for any company trying to classify their staff as self employed.

Domino's will have to pay the employers contribution at least and I imagine share their records with revenue.

That will be an enormous bill for them, hopefully they've been putting money aside in case they lost.

thegolfer

MrMusician18 wrote: »

Domino's will have to pay the employers contribution at least and I imagine share their records with revenue.

That will be an enormous bill for them, hopefully they've been putting money aside in case they lost.

I would say revenue already have the records, part of an audit full details are required to be presented. An auditor would have arrived and requested pay details at the time, and the back ground facts of the workers established.

Bikerman2019

martingriff wrote: »

Should be noted that this is about a company that has a Dominos franchise and not Dominos. But I be guessing that Revenue would demand all info from the company and would do an audit to get as close as possible to the exact tax and then penalties

As far as I am aware, Dominoes do not operate in ROI. What you see on the street are franchises dominated by one or two operators. While the stores are partitioned into certain companies, it's most the same directors. Even though that case listed in the opening post is just one company, it is the same bosses and directors.


What is relevant to one company will be relevant to them all. They could try and delay things if they wish but Revenue would be on to them easy enough. If they wanted to mess around, it would only antagonise Revenue and I don't think that is a great idea.


So one final question. As Dominoes set up this now decided to be false structure, who is going to get the bill? Will it be them? Or will there be a liability on the 9 years of drivers who were told they were self employed and had no part of this argument and have made no provision of this ?

searunner

Bikerman2019 wrote: »

As far as I am aware, Dominoes do not operate in ROI. What you see on the street are franchises dominated by one or two operators. While the stores are partitioned into certain companies, it's most the same directors. Even though that case listed in the opening post is just one company, it is the same bosses and directors.


What is relevant to one company will be relevant to them all. They could try and delay things if they wish but Revenue would be on to them easy enough. If they wanted to mess around, it would only antagonise Revenue and I don't think that is a great idea.


So one final question. As Dominoes set up this now decided to be false structure, who is going to get the bill? Will it be them? Or will there be a liability on the 9 years of drivers who were told they were self employed and had no part of this argument and have made no provision of this ?

If the drivers were self-employed they would have paid the taxes on profits over to Revenue in their tax returns, If Dominoes employed the staff directly taxes would be paid over to Revenue.

So the question is what taxes are o/s, the answer is the employers prsi @ 10.75% so if dominoes is now seen to be the employer they are liaiable for the additional taxes, not the drivers, Good news for the drivers as they will have 9 years stamps paid towards social welfare and the OAP.