Contracts and Self Employment

Author: Garry Crystal

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.

Contract Red Flag Checker

Describe a contract you are about to sign and get a plain English summary of the clauses that could hurt you. Takes about 2 minutes.

Try our Contract Red Flag Checker free, here on this site →

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.

Your situation may be slightly different. ask a question below ↓ and our editorial team will reply with our advice.

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.

The Next Step

Now that you have read through the advice above, you might want to put it into practice. Our Contract Red Flag Checker lets you describe a contract you are about to sign and get a plain English summary of the clauses that could hurt you. Takes about 2 minutes. Try it now →

Showing 20 of 36 questions

Ask Contracts and Agreements a Question

ContractsAndAgreements Editor 20/05/2026 at 9:15 am

@Deb Honestly, that contract reads as employment, not self employment, regardless of what it calls you. HMRC looks at the actual working relationship, so things like control, exclusivity, disciplinary procedures and restraint clauses all point to employee status. The £5k penalty and daily charge sound like a punitive clause, which courts generally won't enforce unless it reflects a genuine pre-estimate of loss. Worth getting it checked by ACAS or an employment solicitor, as you may be entitled to proper employee rights.

Deb 28/09/2023 at 3:42 pm

I am self employed and have a contract my contract states my name and the word "employee" in every section. It has headings Duties, Sickness, Confidentiality, Remedy, losses and damages, Grievances discuss with "employer", disciplinary procedure, restraint of trade within 15 mile radius, return of property equipment etc, it also states to pay £5k to replace loss of employer and payment of £25 per day for 28 days if I were to leave. Surely this can't be enforceable

NJR 18/03/2023 at 10:38 am

I became a self employed last June, However I worked as full time employed from April 2022 to June 2022. Do I need take the money I earned in consideration? Do I need to fill the form with it, or just fill my earns as a self employed.

Thanks

Melnew 24/09/2020 at 2:51 pm

I have been asked by a company to join them but on a self employed basis for the first month to see i like it or they like me... i have never hear of this before.... does it seem a bit dodgy?

Osk 24/08/2020 at 2:18 pm

Hi
I’m self employed and have been working part time for the same company for 4 years.
I pay my own tax and n.i
However - My client now wants me to ask for permission to take holidays - which I don’t agree with. What are my rights?

E 09/05/2020 at 9:42 am

I have worked on a self employed basis full time with the same company for 30 years in home improvements ,have I any employment rights whatsoever in doing this? . They have now asked me to invoice them weekly on work I have completed, why do I need to start doing this after so many years .

Husein 10/01/2020 at 7:35 pm

I am a self employed and working in Amazon last 6 month as delivery driver through RAM distribution Company.Unexpected called me the side maneger and says they don't need my work Service any more without any noticed me before.

What's my right?

Cas 17/07/2019 at 12:15 pm

I’m self employed hairdresser and agreed a % basis on my takings not rent I’ve worked here for 3 years and I’ve got my 3rd week booked off in September this year and the guy who I work for this morn said it’ll be £250 I have to pay in rent for that week off I only work here 3 days I can’t afford that it was never agreed and I also have a baby on the way he said when I came he said he’d give me 2 weeks rent free he did not say this. What can I do

Djs210664 05/05/2019 at 1:22 am

I have worked as a self employed operations manager for 2 years 5 months 5 days a week 40 hours a week and I have just been told my services are no longer needed and have been let go instantly with no pay. Is this legal

Nogs 04/04/2019 at 12:45 pm

I am self employed gardener and have been working for the same school for over 12 years 3 days a week. Until they have reduced to 1 day a week. Do I. have any rights to stop this and ask to be put on 3 days a week.LOG

Cstead 01/04/2019 at 6:35 pm

I’m self employed beauty therapist should I be responsible for my own insurance & who is responsible for risk assessment me or the Buisness owner I rent my space from?

Mark 05/03/2019 at 6:49 am

My partner is self employed and rents a shop unit on a site..where there are numerous other shops. Like a shopping village but separate units.
Can the rental agreement have a clause digtating hours of work and opening times? She is not employed by the site so in my opinion if self employed you should endeavour to carry out sevices?

jikook 12/11/2018 at 3:11 pm

Hi

I have been self-employed on an hourly rate in a company for 6 years .My question :will i be considered as an employee with all the rights as i have been working in this one company for 6 years ? This is my only job .

Coach 11/10/2018 at 11:02 am

I have tried to set my own Facebook page and been told by my management yo take it down as they dont want as to have one. Page was designed to promote my business.What do I do ?

Lizzie Jane 05/03/2018 at 5:44 pm

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

Sparky 29/09/2017 at 5:17 pm

Hi Carol

Would welcome your advice and response to my question left earlier

Dj 09/09/2017 at 12:31 pm

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?

Joba 08/06/2017 at 6:57 pm

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 ?

Brook 26/07/2016 at 10:45 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

??? 29/05/2016 at 4:39 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

Show All 36 Questions

Ask Contracts and Agreements a question

Ask our editorial team a question and we will reply with our advice. Tell us as much about your situation as you can: the more detail you give, the more useful our answer can be.

You do not need to use your real name. Please do not include your full address, phone number, email address, or the names of other people. We may edit or remove identifying details for privacy and legal reasons.

Comments are moderated before publication.