There is much to be thankful for as a freelancer, with all the freedoms and flexibility your status provides, but sometimes it’s easy to get carried away by this new-found autonomy and forget to ensure that your contractual back is covered.
Here’s our top tips to ensure you stay protected and keep enjoying your work, and its benefits.
Whether you are the business looking to take on self-employed extra capacity quickly, or a freelancer thinking,” It’s about time I set something up in writing” (yes, it is!) we now have solutions that won’t break the bank at
Make sure your contract covers these important issues:
- Define what you are doing and how you are going to get paid.
Most people get this right, but make sure it is in writing, as charges per hour, pre day or per project need to clear. Overtime? Extras? Variations? Project creep (You know what I mean by that…. We have all been there…) ie; work outside the scope of the original proposal, all need to be covered too.
- Check your status – this sounds simple, right? You’re a freelancer – what’s the issue?
Make it as clear as possible that you are NOT an employee and this is a contract for services, not a service contract.
Sounds like a right lawyer’s distinction doesn’t it, but it’s important. No contract can completely remove the risk of scrutiny of your employment position by HMRC or the Employment tribunal (take a look at
we wrote for salon owners recently too…) but it is important to set out some areas of what the freelancer provides and how they are ‘controlled’ in their contract – it can be very problematic if an organisation provides self-employed contractors with uniforms, equipment, office space, insurance or vehicles, if you insist they attend a particular work place between particular times – so take some advice!
Unfortunately, its not as simple as ‘I am as defined in the contract’ – if this position is challenged by HMRC checking that tax is being properly paid, or if your fellow freelancers want to challenge their status with the company that you work with. What you are called in your contract is no longer a definitive answer to this question. If the contract sets this out clearly this can help but will not be definitive –
Your label is only part of the puzzle, what actually matters is what’s happening ‘on the ground’ and how much control or instruction you are given by the party you work for. Typically, these are the sorts of indicators that show true freelancer status:
- You chose whether you come to work, and if you don’t, you are not paid.
- You bring all the equipment and tools that you need to undertake your tasks.
- You are not required to wear a uniform, or branded clothing.
- Any vehicle you use is owned and insured by you, and not provided by your work place
- You could send someone to deputize for you in your absence, so long as they have the requisite skills or experience.
- You are told what jobs to do, but not necessarily how to do them.
- You are not paid for any absences, holidays, sick leave or parental leave.
- You insure your own operations.
- You work under a fixed term arrangement for a specified period of time less than 12 months in duration, or on a specified project or assignment, with breaks between any rolling repeat of these arrangements.
None of these indicators is definitive – anyone seeking to challenge your status would look at the position in the round and take a view about whether you were sufficiently controlled and instructed to qualify you as an employee –no matter what your contract says. The Uber case has changed and clarified the law significantly.
Take advice, and be careful, not complacent.
- Intellectual Property – protecting your creativity.
Who owns the rights to what you produce as a freelancer? Do you? Does the party to whom you provide services own everything or anything that you create? And can you use anything you create during the delivery of your services elsewhere? For another project? Another competitor?
These are all questions which arise around the ownership of intellectual property rights ((IPR) in any work that you undertake.
If you were an employee, the basic position would be that any IPR would accrue to your employer – in broad terms – but as a freelancer the position is less straight forward.
Get it clear in the contract, and ensure that if you are creating original materials, ideas, processes, or even goods that you have a potential IPR interest in, you know what you can use elsewhere or exploit outside the confines of the freelancer contract.
- Wonga
Getting paid – no-on likes to be taken for granted and if you have a late payer for your services it can feel like that and be a real challenge. Maybe your contract terms can help that?
Are you clear about what your payment terms are? How many days after invoice are your fees due? Can you flex that time line and shorten the period for persistent late payers? Is it in your contract, and is the right to vary it also there?
Can you down tools if you are not paid, until you are paid? Seems like a no-brainer – you’d be surprised. Unless your terms state so, this is not a given, and in fact could create liabilities for yourself if you stop work without that explicit right to do so, and the other party suffers a loss. Be careful.
Can you ask for money in advance under your terms? Particularly if you have had your hands burned, or the other party presents a bigger risk, or has a reputation?
Think about charges for late payment – some will impose an administration fee added if you are required to chase late payments, and you have the option of addition contractual or statutory interest on any late payment. Make sure your terms deal with this in line with your legitimate entitlements – and for further info you could look here…
- What’s your escape plan?
Does your contract have a notice period to terminate the contract for services that will work for both parties? and does it allow for immediate termination in some situations – like a failure to pay, or an insolvency situation?
Now, do you think you need a contract?
Two versions of our freelancer contract template are available – one for the business taking on the freelancer, and one for a freelancer to provide to any business they intend to work for and provides services to. Check them out here.
Or do you need a review of what you have?
We do those too……
If you need further advice on any of these issues, please contact me:
Heather Stanford Managing Director
Stanford Gould Limited
June 2021