Contract for services: self employed contractors
This is a contract for any type of work between a self-employed contractor (either a sole trader or operating through a service company) and his or her client. Use this document will strengthen the proposition that the relationship is one of business service provision and not one of employment.
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About this document
This contract sets the terms under which a self-employed contractor will provide services to a client. It can be tailored for any type of work.
The contractor is likely to be a sole trader, but could be working through his or her own company. Some of the work could be subcontracted.
The agreement has been designed, as far as possible, to distinguish the relationship as a business one, and not one of employment.
The document can be edited and reused for each new client that you win. It should be presented to new clients before work starts. If you subsequently perform more work for the same client, your pre-agreed terms automatically cover that new work (unless you want to specify otherwise) allowing you to focus on winning and performing the work rather than dealing with administration.
It is suitable for any service provider, including:
professional tradesmen such as builders, plumbers, electricians, plasterers, decorators and gardeners
professional service providers, such as domestic energy consultants, or business marketing consultants
self employed people undertaking specific pre-defined project work, e.g. commissioned artists, or graphic designers
But note that we do have a range of agreements tailored for specific construction industry trade as well as a large number for many other business sectors.
The law relating to this document
A contract for services is a common law term and not defined by legislation.
However, a contract of service is defined in employment and tax legislation, meaning an employment contract.
If you’re self-employed, you should make sure that your terms with your client, as far as possible, define your relationship as a business to business one. If HM Revenue & Customs could argue that in reality your agreement was in fact a contract of service then your client would be deemed to be your employer and be compelled to hold back your tax and National Insurance contributions under the usual PAYE rules.
It goes further than that for your client. If it could be argued that you are not self-employed but rather an employee, then the client would have further costly obligations to you under employment law such as statutory holiday leave. Savvy clients are likely to reject any contract that may make them an employer. On the other hand, a well written contract, like this one, is likely to impart professionalism and signal that you take your business seriously as it protects your client as well as you.
A well written contract therefore identifies the issues that HMRC or an employment tribunal might consider and clarifies the terms of the agreement so that it would be difficult to argue that the relationship was one of employment. In practice, HMRC will “look through” the legal agreement at the reality of the situation, but setting out the considerations in writing supports a claim of self-employment and ensures that both parties are clear as to how they should act to maintain the relationship as a one of service provision rather than employment.
This is an “over-arching” agreement designed for ongoing use to cover a series of assignments.
- Service provider to work from home or at client’s premises
- Provides a complete legal and commercial framework
- Reduces the chances for employer obligations to arise
- client warranties
- the assignments
- fees and expenses
- use of sub-contractors
- disclaimers and limitation of liability
- duration and termination
- assignment of the contract
- uncontrollable events (force majeure)
- successors to the agreement
- other miscellaneous matters
This document was written by a solicitor for Net Lawman. It complies with current English law.
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