Contractor Contracts

In the UK over 730,000 people are self-employed and it is becoming more and more common for businesses to hire contractors to do a job. But because a contractor is different to an employee, where do you even start?

Contractors are more cost-effective and also have a wealth of knowledge and experience. However they don’t have the same rights as an employee, so it is important to have a legal framework in place that will protect both the business and the contractor.

It is vital to differentiate a contractor, to manage liability within the business and clearly define the relationship between both parties in relation to HMRC IR35 regulations. IR35 exists to ensure that individuals are working as a contractor rather than an employee; this is there to help combat exploitation.  An employee would naturally receive sick pay, holidays etc, so if the company can’t demonstrate separation and define this relationship then HMRC will crack down, which could result in paying years of backdated tax and appropriate penalties.

At Create Ts and Cs we understand your world. We want to help you navigate the law and ensure that a contract clearly reflects the business relationship. It is critical in terms of HMRC to differentiate both parties.

Issues like who owns the client, payment terms and the issue of the ownership of intellectual property are key in a contractor agreement.  A diligent approach to contractor management will help the company manage the risk of hiring a freelancer or contractor and allow both parties to benefit from the agreement.

We take the time to understand your business relationship so that it can be correctly reflected within the contract. We want to help protect you and allow your business to grow.