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Contracts and Self Employment

By: Garry Crystal - Updated: 22 Jun 2017 | 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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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
Hi, do i have a right to see a contract that i have questionable signed? The contract in question was to confirm that i am self employed, bound to the agencys terms and conditions. Thanks
??? - 29-May-16 @ 4:39 PM
Donna Tutor - Your Question:
Hi I am freelance and have a signed contract however the company wanted the payment terms extended and for me to sign a new contract. I refused to sign and they terminated my services. They advised in writing termination of one month notice, an I entitled to payment during the notice period?

Our Response:
You would have to read the terms of your contract. If you are freelance, I assume you would be only entitled to payment if you were still continuing to do the work.
ContractsAndAgreements - 26-May-16 @ 12:51 PM
Hi I am freelance and have a signed contract however the company wanted the payment terms extended and for me to sign a new contract.I refused to sign and they terminated my services.They advised in writing terminationof one month notice, an I entitledto payment during the noticeperiod?
Donna Tutor - 25-May-16 @ 10:12 PM
I started a role 8 weeks ago the contract is written that I'm a self employed contractor. However I'm contracted 37.5 hr on x rate, can't choose my hours, substitute anyone and there is no end date. When I go on HMRC it says I'm deemed employed.I handed my notice in 2 weeks ago , the contract states I have to give 3 months notice. I'm not busy and sat twiddling my thumbs and have asked to either reduced my hours or leave early and they were pretty nasty when I said I originallywanted to leave. I am waiting on the response to my request to leave early ( 2 weeks after hanging my notice in) . My question is , is this contract legal if a 'false self employment 'which I have subsequently discovered since signing it and can they make me work out the 3 months?
Helen - 25-Oct-15 @ 8:41 PM
Hi, I am a self employed freelance model & have been working for the same retailer for 2 days a week for nearly 8 years. There is no written contract in place, the only thing I have in writing is that they will give me 1 months notice if they should not need my services any longer. I have no problem with the arrangement & there has never been an issue with payment or anything, however I am trying to get a mortgage & the lender requires a copy of a contract to prove my ongoing income. So far my client has refused to create a contract for me, however is there not an obligation on their part?
jados - 29-Sep-15 @ 6:41 PM
Jess - Your Question:
I started in a self employed position, but didn't receive a contract for 4 months. When I received it I objected to certain clauses in writing which was never responded to. I left the company 2 weeks later not having signed the agreement. Can the company now enforce any of the clauses contained in that agreement? Many thanks.

Our Response:
You don't say what the clauses were. However, if you have not signed the contract, then it is unlikely your company would have any recourse, especially if you objected to the clauses in writing and the issue was never resolved.
ContractsAndAgreements - 7-Sep-15 @ 11:38 AM
I started in a self employed position, but didn't receive a contract for 4 months.When I received it I objected to certain clauses in writing which was never responded to.I left the company 2 weeks later not having signed the agreement.Can the company now enforce any of the clauses contained in that agreement?Many thanks.
Jess - 4-Sep-15 @ 11:15 AM
I'm self employed barber.do I have to sign a contract
pippas - 25-Jul-15 @ 8:42 PM
Forgot to mention I have "fit for work" doctor's letter dated June 1.Start of contract is late evening June 4.I have told them since Friday last week (6 days notice) that I would be fit.
les - 1-Jun-15 @ 8:46 PM
I work on short-term contracts for the same company (over 20 year relationship).I was ill and warned them that I might not be well for next contract date.I kept in touch on my progress and gradual return to health (we are only talking a week or so).I suggested that they have a plan B in place in case the circumstances and location made replacement somewhat difficult (overseas).At no time did I use the words resign, cancel contract, cannot fulfiletc.However, they replaced me by topping up a local's salary and told me the contract was null and void.The senior manager backed up the person who made the mistake.My doctor said I did not have to tell them anything as I was not in their employ at the time. I stand to loose several hundred pounds.I feel the company has turned on me in a very nasty way to cover their mistake.I should have been consulted as I was in touch daily before they took the decision to tear up the contract.I have another one pending for later in the month.
les - 1-Jun-15 @ 8:41 PM
I am Contracting and i started the contract 2 months ago.The agency officially offered me this. I am very pleased to make you a formal offer as follows:- Role: Senior Metallurgist > > Location: Leatherhead / Surrey > > Project: ******* > > Duration: 10 months + > > Rate: Ltd > > Start date; 2nd March 2015 > Please confirm acceptance of the above offer. I was told verbally and in email and also in contract that the contract would be 10 months onwards. Yesterday i was given seven days notice of termination. Can i object to the termination and ask for the 10 months contract to be upheld?
Sarah - 30-Apr-15 @ 11:57 AM
@Rach - if you haven't signed a contract then it shouldn't be an issue. But just to be on the safe side I'd ask Acas to see if there could be any comeback.
Erin - 2-Apr-15 @ 11:10 AM
I'm a self employed hairdresser and I have given my 2 weeks notice. When I started I was given a contract which stated not to contact clients upon leaving . I refused to sign the contract. Now I am leaving and haven't signed a contract can it still be used against me if I contacted clients? Bearing in mind also that the clients are part of my business also
Rach - 31-Mar-15 @ 12:04 PM
@telecomsid - you would have to look in the terms and conditions of your contract, or speak to them directly if you are finding you are out of pocket.
Neil - 18-Mar-15 @ 2:49 PM
I work as a contractor for a telecoms company, we lease the vanand tools required from them for £100 a week plus VAT. We get £126 a say for a 5day week, if we dont do the 5 days, as has recently beenthe case we get a reduced lease of £70 p/w. However we then have to put fuel in the vans from our own pocket. Is this covered under UCTA, if so, what can i do going forward?
telecomsid - 16-Mar-15 @ 4:37 PM
@Els - are you an EU student, is this what you want to know, as your question is a little confusing? If you are from the EU, then anyone from the of the member states can take up any lawful employment in the UK and do not need a work permit and yes, you can also register as self-employed. I hope this helps.
ContractsAndAgreements - 12-Feb-15 @ 12:00 PM
Hello, I am student living in Cambridge since September and as I just finished my course here I am looking for a job. I was wondering if I need to get any paperwork for this and if I can be self-employed? I already did a DBS check. Thank you!
Els - 11-Feb-15 @ 3:40 PM
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