Compliance in logistics is not a check you complete once when a driver starts. Licences, Driver CPC cards, tachograph cards and IR35 status determinations all carry dates, and each one has to be tracked for as long as the driver works for you.
Many operators still track these dates in spreadsheets or in a transport manager's diary. That works until someone is off sick, a file is overwritten or a renewal slips past unnoticed. This article sets out the main driver compliance obligations and how your ERP can manage them systematically.
This article is general guidance, not legal or tax advice. Rules change, and your obligations depend on your circumstances, so take specialist employment and tax advice before acting.
IR35 and the Off-Payroll Working Rules in Logistics
Many logistics businesses engage drivers who work through their own limited company, known as a personal service company (PSC). The off-payroll working rules, often called IR35, apply where a worker provides services through an intermediary like this and would be treated as an employee if they were engaged directly.
Self-employed sole traders are not covered by the off-payroll rules, because there is no intermediary. Their status is still a question of employment status, which HMRC can challenge in the normal way.
Since 6 April 2021, medium and large private sector clients have been responsible for deciding whether each off-payroll engagement falls inside or outside IR35. Small clients are exempt: if your business is small, the worker's PSC makes the decision instead. From April 2025, a company counts as small if it meets two of these three tests: turnover of no more than £15 million, a balance sheet total of no more than £7.5 million, and no more than 50 employees.
Where the rules apply, responsibilities are split along the supply chain:
- The client decides the worker's status, takes reasonable care in doing so, and issues a Status Determination Statement (SDS).
- The fee payer, the business that pays the worker's PSC, deducts income tax and National Insurance from inside-IR35 payments and pays employer's National Insurance. If you pay the PSC directly, you are the fee payer. If an agency sits between you, the agency usually is.
Status turns on the working arrangement as a whole. HMRC looks at factors such as how much control you have over how, when and where the work is done, whether the driver can send a substitute, and whether there is an ongoing obligation to offer and accept work. HMRC's Check Employment Status for Tax (CEST) tool is a useful starting point, but it does not replace a considered review.
Getting determinations wrong is a material risk. If you fail to take reasonable care, or fail to pass the SDS on, the tax liability can move to you. Underpaid tax and National Insurance, interest and penalties can then build up over several years before an HMRC enquiry brings them to light.
What the ERP should record
For every off-payroll engagement, keep a dated record of the SDS, the outcome, the reasons given and the date it was last reviewed. You should also record who received the SDS and any disagreement raised by the worker, because you must respond to a disagreement within 45 days.
In Business Central, this record sits naturally against the vendor record for the driver's PSC. The SDS itself can be attached to that record, and a review date can trigger a Power Automate reminder when the determination is due to be revisited.
Driver Licence and CPC Compliance
Professional drivers of lorries and buses must hold a Driver Certificate of Professional Competence (Driver CPC), unless an exemption applies. To keep it, they must complete 35 hours of periodic training every five years. The Driver CPC card must be valid whenever the driver is driving professionally.
Driving without a valid Driver CPC exposes both the driver and the operator to enforcement action, and repeated failures can be raised with the Traffic Commissioner when they review the operator's licence.
Entitlement can also change during employment. Endorsements, or a medical condition the driver must report to the DVLA, can affect whether a driver may drive commercially. That is why licence checks need to happen at regular intervals, not only when a driver joins.
Managing expiry dates systematically
Business Central can hold driver compliance dates against employee and resource records. Employee qualifications, each with a start and end date, are a natural home for licence categories, Driver CPC and tachograph cards. Medical certificate dates and licence check dates can be added with light configuration.
Power Automate flows can then alert the right manager as each date approaches, leaving enough time to book training or arrange a renewal. The same approach works for operator licence undertakings that require checks at set intervals.
Tachograph and Working Time Records
Operators must download data from driver cards at least every 28 days and from vehicle units at least every 90 days. Tachograph records must be kept for at least 12 months and produced to DVSA on request.
These records show compliance with the drivers' hours rules. Drivers who come under the EU or AETR drivers' hours rules are covered by the Road Transport (Working Time) Regulations 2005, rather than the general Working Time Regulations, and their working time records must be kept for two years.
Where you analyse tachograph data in-house, the downloaded files must stay available for audit. Connecting your tachograph analysis software with Business Central lets driving time, working time and infringements sit alongside the driver's other records, so trends are visible in one place.
Subcontractor Driver Management
Subcontracted carriers add a second layer of compliance, because you have limited direct visibility of their drivers. Contracts should require subcontractors to confirm, before work begins, that their drivers hold valid licences and Driver CPCs, and to tell you if that changes.
In Business Central, these requirements can be built into your purchase terms. Each subcontractor's compliance confirmations can be stored against their vendor record, with review dates that trigger reminders in the same way as your own drivers' records.
Building a Compliance Infrastructure
The tools for systematic driver compliance already exist in the Microsoft platform that many logistics businesses use or are moving to. Business Central holds the records, Power Automate sends the alerts, and Power Apps can give managers a simple mobile form to update records out in the depots.
For most operators, this is a configuration and process design exercise rather than a large new technology investment. Advantage helps logistics businesses configure Business Central for exactly this kind of operational and compliance tracking. Ask our team how it would work in your environment.
Talk to Our Logistics Team
The risk in spreadsheet or diary-based tracking grows with every driver, vehicle and subcontractor you add. A systematic process, with alerts that do not depend on one person remembering, removes most of it.
Contact Advantage today or call 020 3004 4600 to speak to our team.
Related Resources
- Dynamics 365 Business Central
- Microsoft Power Platform
- Warehouse Automation Without the Price Tag: What Microsoft Power Automate Can Do Today
- Operational Efficiency and Automation
- Logistics and Distribution Solutions
Frequently Asked Questions
What are the IR35 obligations for logistics businesses using self-employed drivers?
If a driver works through their own limited company and your business is medium or large, you must decide whether each engagement is inside or outside IR35 and issue a Status Determination Statement. Whoever pays the driver's company, you or an agency, must deduct tax and National Insurance from inside-IR35 payments. Small businesses are exempt, and drivers who are sole traders are outside the off-payroll rules altogether.
What driver compliance records should a logistics business maintain?
Keep records of each driver's licence categories and endorsements, licence check dates, Driver CPC status, tachograph card number and expiry, medical declarations where required and training. For drivers engaged through a limited company, also keep the engagement terms and IR35 determinations. Your system should alert you before anything expires.
How does Dynamics 365 Business Central help with driver compliance?
Business Central holds employee, contractor and subcontractor records, including compliance details and expiry dates. Power Automate can notify HR or operations managers when a licence, Driver CPC or tachograph card is close to expiry. Business Central does not run UK payroll itself, but it can connect to your payroll system so compliance and contractor payment records stay consistent.
What is an IR35 Status Determination Statement, and who issues it?
An SDS is the client's written decision on whether an off-payroll engagement is inside or outside IR35, with the reasons for it. The client must give it to the worker and to the business it contracts with, and must have a process for handling disagreements. If the client does not pass the SDS on, it can become liable for the tax itself. Review the SDS whenever the working arrangement changes materially.
