Contracts

An arrangement will only amount to genuine “self-employment” in law if all of the arrangements, facts, and circumstances amount to self-employment.

If a PSC is involved, you must consider how the contract is implemented and all arrangements between PSC, the client and worker. Where there is no PSC, and a worker deals direct with their client, you must consider how the contract is implemented, the conduct of client, worker, and anyone the worker engages to do any of the work for them, and all related arrangements between them.

If there is a PSC, to reduce the risk that IR35 will apply, there should be a suitable contract and arrangements between the PSC and the client which has the features of a contract for services, and not those of a contract of employment. There should also be a suitable contract between the PSC and the worker with features as much like a conventional employment contract as possible. Our Guidance Note (which you can see here) explains these features.

You need to determine the details of the arrangements and document them for IR35 purposes, to try to ensure that claimed self-employed status is genuine rather than merely a tax-driven device or an attempt to avoid employment protection rights. A detailed contract ensuring the independence of the worker is a key starting point.

We have numerous templates in our Business and Employment folders which might help with these issues. You can see them here.

Employment, self-employment, and IR35 are complex subjects, and we strongly recommended that you take tax and legal advice before relying on or using any of our template documents or other material on our website, or implementing any arrangements.