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Contracts and Self Employment

By: Garry Crystal - Updated: 5 Mar 2018 | comments*Discuss
 
Contracts Self Employed Workers

When it comes to contracts and self employment there will be some differences between those rights afforded to employees working for an employer and people who are self employed. One of the major differences is that a self employed person will be responsible for their own tax and national insurance contributions. However there are still some contracts and self employed stipulations that must be considered.

Self Employment and the Employer

A self employed person will not usually have a contract of employment; they will usually be hired for a certain amount of time. The contract that exists between the self employed person and the person or company supplying the work will have a number of rules or conditions set down within it. The conditions will usually include rates of pay, length of time to complete a job and the services that will be offered and expected.

Self Employment Contracts and Agreements

Many self employed people work on a verbal agreements only basis, for example some individual trades people. However a verbal agreement to undertake work is still a contract and if this contract is breached then the worker can be sued by the person who has hired them. Written contracts are usually the best way to do business as they can clearly state the expectations, terms, and services that the self employed person offers.

Employee or Self Employed?

When it comes to worker’s rights one of the main differences is that the self employed are not generally protected by employment law. Many employers will use the term “self employed” for casual workers specifically because they think they will not have to pay casual workers tax or national insurance contributions. The employment statutory rights of an employee are also far greater than those of a self employed person.

If you have been offered work by either an individual or a company then it is important to find out whether you are classed as self employed or an employee. Self employed people may have greater control over time constraints, pay and decisions whether to refuse or accept work but they also have more financial responsibility. They will have to calculate and pay their own tax and national insurance, hire an accountant and may be responsible for employing their own staff.

The Importance of Contracts

It is important for the self employed to have a set of contracts laid out. Many self employed business people will hire someone to draft contracts for them as there can be clauses included that have legal definitions. One of the essential contracts for self employed people will be a contract for services. This contract should set out in detail the relationship between the self employed worker and the person they are hired to work for.

The contract for services should include clauses such as “no mutual obligations” meaning there is no obligation for either party to offer work, accept work or remunerate for work not undertaken. There can also be a clause included that limits or eliminates the amount of control regarding how you undertake the work; it will be the self employed person’s responsibility how the work is carried out. There should also be a substitution clause that permits the self employed person to employ a qualified worker to carry out work given to the self employed individual.

Where to Find Contracts

For the newly self employed person the range of contracts available can be bewildering. However there are websites where draft contracts can be downloaded for use. Be aware that some of these contracts will cost money to download. It may be a better financial option to invest in a few books that supply information on how to draw up your own contracts. Alternatively if you know someone already in business for themselves then you could always ask to view their contract templates to give you an idea of the layout and clauses. Information on contracts can also be found by small business advisors or government small business schemes.

The importance of well set out contracts and self employment stipulations should not be underestimated. The self employed have far fewer employment rights and more financial risk then regular employees. In some cases the contracts will be the only legally binding record available. The contracts are important documents in establishing the services and expectations between the self employed worker and those who are hiring them.

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I have been self employed sole trader for many years. Approx 7 years ago i became employed as a carer. And susequently offered carer work self employed as this client did not want to use a finance management company. I did not mind as i had been self employed before.I knew the clients daughter well who has challenging behaviour. With all the pay restraints lack of mileage etc. I checked HMRC say i should be employed for tax purposes. The client has flatly resfused to accept this and said he would never employ me or any one else. He thinks he his above the tax man. Unfortunately o really care about his daughter who has improved so much in the 6 years i have worked with her.. she would suffer if i left her. The council that pays direct debits only pays 48weeks per year and the clients social worker is aware i am self employed with the client. She denies all knowledge of the working status check with HMRC which the client should do at the begining if accepting the Direct Payment. She refuses to discus anything with me and tells me to sort with the client. I am scares. Frightened but dont want to leave my client without a proper long transition. I am scared too i am nearly 60 and would find it hard to get a job... any help or guidance please
Lizzie Jane - 5-Mar-18 @ 5:44 PM
@susie - If no contract was made or signed stipulating this, then the 'coach' has no legal rights.
Mitch3 - 9-Feb-18 @ 3:30 PM
Could you please answer the question from Chole91 above as it's the same question I was going to as except I have a contract
susie - 30-Jan-18 @ 7:38 PM
CKMUAB - Your Question:
Hi I am opening a salon in the next 2 weeks and I am looking to have self employed staff renting a work station from me, however I still want to have a contract in place. Could anyone suggest any websites where I could download a self employed work contract.Thanks in advance.

Our Response:
You can see more via the gov.uk link here , which will tell you all you need to know regarding what a contract should contain. However, you would have to do an online search for self-employed contract templates, as we cannot recommend.
ContractsAndAgreements - 16-Jan-18 @ 11:36 AM
Hi I am opening a salon in the next 2 weeks and i am looking to have self employed staff renting a work station from me, however i still want to have a contract in place. Could anyone suggest any websites where i could download a self employed work contract. Thanks in advance.
CKMUAB - 15-Jan-18 @ 2:28 PM
@nicmai - if you do not have a contract - then there is simply no contract and therefore no written repercussions - so you can leave when you wish and there's nothing your employer can do.
BBB - 15-Jan-18 @ 1:37 PM
Hi, I've worked as a dental hygienist and therapist at an NHS practice for 4 years.I am self-employed with no contract. I have given 6-8 weeks notice to leave for another job.The practice manager is trying to tell me I am obliged to give 3 months notice. Im I right in thinking I don't need to give any notice?? Thank you
nicmai - 14-Jan-18 @ 5:17 PM
Nilda- Your Question:
Hi I have worked as a self employed for the some person for over 5 years now. I’m a carer for a disabled person.there are free of us working.I work 32 hours a week,and one of the carer work 11 hour a week and the other one 8 hours a week. but the lady who work 11hours she is a employee. And she is on the some hourly rate than me. is that normal? Another Insue is that my hours changed a few times since I started.I started 38hours weekly than 36 and now 34 but the crazy contract never been changed.i do the some hours Monday till Friday.I need to understand where I’m standing with all this. another think I work bank holiday Christmas Day, for the some money an a normal day is that normal ? I’m so confused I do pay my tax every year but sometimes I think I’m half employed!? Any advice ?

Our Response:
You can check whether you are self-employed or employed via the link here. If you are still in any doubt about your employment status, you are best advised to give ACAS a call.
ContractsAndAgreements - 5-Dec-17 @ 11:06 AM
Hi I have worked as a self employed for the some person for over 5 years now .. I’m a carer for a disabled person..there are free of us working ...I work 32 hours a week,and one of the carer work 11 hour a week and the other one 8 hours a week ... but the lady who work 11hours she is a employee. And she is on the some hourly rate than me ... is that normal? Another Insue is that my hours changed a few times since I started ..I started 38hours weekly than 36 and now 34 but the crazy contract never been changed ...i do the some hoursMonday till Friday ..I need to understand where I’m standing with all this.. another think I work bank holiday Christmas Day, for the some money an a normal day is that normal? I’m so confused I do pay my tax every year but sometimes I think I’m half employed!? Any advice ?
Nilda - 4-Dec-17 @ 1:06 PM
I have worked as a self employed hygienist in a dental practice for 5 years, I am now looking to leave but my contract requests I give 3 months notice - I only wish to give a month as my new job wants me to start ASAP. Where do I stand with this? Is the contract legally binding in anyway or as a self employed person can I dictate my notice regardless of what's in writing?
Becky88 - 24-Oct-17 @ 3:59 PM
@Sparky - a contract can say whatever it wants to say - it's whether you agree with it or not. I'd pull your employer up directly and ask can it be written to say 'guarantee'. However, it's still only written on paper. If, for instance your employer had no money to pay, it wouldn't matter if it said guarantee or endeavour - it'd still be tough to get your money.
Lou - 2-Oct-17 @ 3:36 PM
Hi Carol Would welcome your advice and response to my question left earlier
Sparky - 29-Sep-17 @ 5:17 PM
Can you pls advise if it is legal for an employer stipulate the term "endeavour" to pay In a if in a self employed services contract agreement or must it legally state guarantee payment terms e.g On a fixes date of the or within 7 days of invoice ?
Sparky - 22-Sep-17 @ 6:29 AM
Hi I work as a receptionist/admin I'm self employed is there anything that I need to do such as fill out a tax form? Also I'm looking to get a car on finance will this work?
Dj - 9-Sep-17 @ 12:31 PM
@katy - if you are self-employed and you don't have a contract, there is not much you can do :(
Jacq - 4-Sep-17 @ 3:21 PM
Im self employed in a barbers. I rent a chair off the landlord i started this job in January iv been doing hairdressing years but i wanted to be self employed. Iv had problems with one of the girls in the shop that has been there since the start. the problem is a personal matter out of the work place. She has now got the landlord who i rent my chair off to tell me to leave. Where do i stand in this situation. i have no contract.
katy - 2-Sep-17 @ 7:39 PM
Hi I currently work for some one as an assistant on a self employed basis but I never use my own equipment and in the contract I signed last year (it's due for renewal) it stated 6 weeks notice is required to terminate my work there. Surely being self employed I can leave without notice?
Ak - 22-Aug-17 @ 6:35 PM
Hi I am a self employed coach and have recently left a team I have been with for a number of years. I have now set up on my own and the coach of the old team is saying she will sue me if I accept any of her athleates old or new for a 12 month period. She says there was a contract that stipulates this however I do not have a copy and do not recall this. Surly as a self employed freelance coach she is not able to enforce this? Thank you
Chloe91 - 10-Jul-17 @ 9:24 PM
Carol - Your Question:
Good morning I work for a couple in there own home when I started her partner who has alziemers was a lot better than he is now he has deteriated over the last year nw he nds constant care as well as that I have to do everything for her when she can do a lot for herself but chooses to use the carers to do it I have charged £10 pnd an hour for over twould years but my work load has doubled she also has a parrot the she wants us to clean out daily and a few weeks ago gt a puppy that she expects us to clean up after I work 9 till 5 Monday to Friday I don't get a break because I'm in the house 8 hours I need a contract but not sure how to start one up sum advice would be great kind regardsCarol

Our Response:
You need to speak to the wife directly regarding having a break, which by law you are entitled to (whether the break is paid or unpaid). You are responsible for organising your own employment schedule if you are self-employed and this should be done directly with your employer.
ContractsAndAgreements - 23-Jun-17 @ 10:49 AM
Good morning I work for a couple in there own home when I started her partner who has alziemers was a lot better than he is now he has deteriated over the last year nw he nds constant care as well as that I have to do everything for her when she can do a lot for herself but chooses to use the carers to do it I have charged £10 pnd an hour for over twould years but my work load has doubled she also has a parrot the she wants us to clean out daily and a few weeks ago gt a puppy that she expects us to clean up after I work 9 till 5 Monday to Friday I don't get a break because I'm in the house 8 hours I need a contract but not sure how to start one up sum advice would be great kind regards Carol
Carol - 22-Jun-17 @ 10:15 AM
I am classed as self employed but get paid through the local authority on the same date every month. All wage slips etc come from the local treasurers office. They are now trying to issue me with a written warning, can they do this ?
Joba - 8-Jun-17 @ 6:57 PM
I recently had a employer who wanted me to work as a self employed worker. I have never been self employed before but didn't mind this as i was happy to get work. However the contract he gave me was a doctored contract of employment. Where it said employee its was crossed out and self employed was written in. all the statements for holiday pay, sick pay entitlement were crossed out. i was to do my own taxes an ni contributions. and i was payed less than minimum wage. I thought that was ok because i thought i was self employed. In the contract there was a non compete clause that i failed to notice that he is now bring to my attention to stop me from working as a self employed person. Is he breaking the law as it seems to me he has set up a contract that gets the best bits of both sides of the fence.
richie - 1-Apr-17 @ 8:47 AM
I started as a self imployed cleaner at a club 10 yrs ago after a year i was put on paye as a cleaner but also i helped behind bar and kitchen . but now only do the cleaning as of 2 years ago i get payed holiday an sick and they pay my tax and n.insuranceso i presume im an employee .i had a contract when i first started there as self employed but is it still valid now as they never redone me another one when i went on paye . i want to leave and it says on the origanal self employed contract that i have to give 6 months notice.is this still the case or can i just leave
Forddy - 2-Feb-17 @ 7:39 PM
I started as a self imployed cleaner at a club 10 yrs ago after a year i was put on paye as i helped behind bar and kitchen but only do the cleaning i get payed holiday an sickso i presume im an employee .i had a contract when i first started thete self employed but is it still valid noow im on paye as i want to leave and it says i have to give 6 months notice
Forddy - 2-Feb-17 @ 7:15 PM
Mike - Your Question:
I am a self employed Mayor's attendant working for a contractor. I have no contract, verbal or written, and have been doing the job for 5 years. I drive a company car for the work and drive it to and from work and wear the companies uniform. It takes me between an hour and an hour and a half to get to my place of work.My question is. Am I legally entitled to be paid for travelling time to and from work whilst driving a works vehicle?

Our Response:
You have no specific rights if you do not have a contract or are self-employed. Whatever renumeration you agree on should be negotiated directly with your employer.
ContractsAndAgreements - 25-Jan-17 @ 10:26 AM
I am a self employed Mayor's attendant working for a contractor. I have no contract, verbal or written, and have been doing the job for 5 years. I drive a company car for the work and drive it to and from work and wear the companies uniform. It takes me between an hour and an hour and a half to get to my place of work. My question is. Am I legally entitled to be paid for travelling time to and from work whilst driving a works vehicle?
Mike - 24-Jan-17 @ 10:41 AM
I'm a tattoo artist based as self employed in a studio. The company provides all of my consumable and I am paid a % of each tattoo I do. What should my contract include if I am self-employed?
tattooartist - 21-Jan-17 @ 1:47 PM
I have worked for a security company as self employed and they have lost the contract at the place I was working and I start work straight away at the same company they have lost the contract to but old company are saying I can't work for the company they lost the contract to And they're saying I have signed a contract with saying I shouldn't work there even though am not aware of any contract I have signed with them And they're still withholding the last payment I worked for them for that reason Can anyone give me an advice
G - 16-Nov-16 @ 9:52 PM
I signed a contract with people I worked with. I am self employed, things did not work out and after both agreeing this they asked me to leave. Regarding pay they are now saying they are not going to pay me in full but make deductions for inconvenience caused - is this allowed? I completed all my shifts with no complaints made, in fact their clients are sad to see me go! Who can I contact for advice?
Jane - 24-Sep-16 @ 5:22 PM
Hi, I've just been offered a receptionist job however they have told me I need to go self employed. Now I've been told by self employed friends that the company who have taken me on may not be doing it all above board of this makes sense and with what I'm going to wright below that they should have me as an employee and not self employed. Reasons are I have to be at work 15 minutes before clinic opens and leave 15 minutes later to insure the clinic is clean and tidy I have to complete tasks they set on a day to day basis, I use their own equipment that they provide like computer, printer, headed paper for their company sell their products and I also book and see to their clients and wear their uniform. I don't really have a say, so in my eyes I am like an employee. So my question really is this: shall I be self employed or an employee? and is the company doing everything legitimately? What's people's views Ive never worked self employed before so I don't know what's rite or wrong. TIA
Brook - 26-Jul-16 @ 10:45 PM
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