Home » Self-employment and Consultancy

Self-employment and Consultancy

What does it mean to be self-employed?

Someone is likely to be self-employed (sometimes referred to as a consultant or a freelancer) if they:

  • Are providing a service on a freelance basis or through their own limited company;
  • Can decide when and how they do the work;
  • Can work for more than one company (sometimes referred to as a “client”);
  • Can send someone else instead of them to do the work (often referred to as a “right of substitution”);
  • Invoice for doing their work as opposed to getting paid a salary;
  • Are responsible for their own tax.

What rights does a self-employed person have?

Apart from those set out in their written contract, not many compared to those who are employees or workers. However, they do have protection from being discriminated against, and they must also have their health & safety looked after when they’re working at a client’s premises.

What paperwork should be in place for a self-employed person?

A written contract setting out the relationship between the self-employed person and the company (or client) is a must. This is often referred to as a consultancy agreement or a contract for services. Seek legal advice before putting one in place however, because it’s important to get them right at the outset.

What should be included in a consultancy agreement?

As a bare minimum, you would expect a consultancy agreement to include things like:

  • What service (or time commitment) is to be provided by the self-employed person;
  • What fees will be paid to the self-employed person;
  • How long the arrangement will last and how it can be ended;
  • What information should be kept confidential by the self-employed person;
  • Who will own the intellectual property rights of anything created by the self-employed person?

Just because someone has a consultancy agreement, does that definitely mean they’re self-employed?

No. Whilst the written contract is important, the main question will be whether the relationship, in reality, is a self-employed relationship. If it isn’t, there’s a risk that a court will decide that the self-employed person is actually an employee or a worker, and have all the employment rights which come with that.

Can someone be self-employed through their own company?

Yes. Often an individual will set up their own limited company (sometimes referred to as a personal service company) in order to provide their services and charge their fees through that limited company. There can be some tax advantages to doing this. However, care should be taken with operating this way due to the possible impact of IR35.

What is IR35 and how does it work?

IR35 is a piece of tax legislation. It means that, despite someone providing self-employed services through their own limited company, if in reality the relationship between them and another company is more like that of an employer-employee, the self-employed person will end up being taxed as an employee. This will mean that the company using the services of the self-employed person will be responsible for making deductions for tax and national insurance before paying the self-employed person.

When will IR35 definitely not apply?

Even where a company (let’s call them Company A) contract with someone through their service company (let’s call it Company B), IR35 won’t apply where Company A is a “small” company. A small company is one which meets two or more of the following:

  • Has an annual turnover of no more than £10.2m;
  • Has a balance sheet total of no more than £5.1m;
  • Has an average of no more than 50 employees.

If you need any advice on self-employment or consultancy, please contact a member of our employment law team in confidence here or on 02920 829 100 for a free initial call to see how they can help.


To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.

Contact Our Team
Bríd Price
Solicitor
View Profile
Damian Phillips
Partner
View Profile
Fflur Jones
Managing Partner
View Profile
Fiona Sinclair
HR Consultant
View Profile
Heledd Evans
Trainee Solicitor
View Profile
Nicole Brendel
Solicitor
View Profile
Owen John
Partner
View Profile
Rachel Ford-Evans
Senior Associate
View Profile
Seren Trigg
HR Consultant
View Profile

I have worked with Darwin Gray for a number of years and the level of service, professionalism and timely response is second to none. I would highly recommend Darwin Gray to any business.”

Becs Beslee
Dice FM Ltd

Darwin Gray have provided us with a first-class service for many years now. They really take the time to understand our business and develop relationships which results in advice and support that is contextualised and effective.”

Rebecca Cooper
ACT Training

We have worked with Darwin Gray for several years and have always found their services and advice to be first class.”

Karen Gale
Stepping Stones Group

An extremely professional and sincere company who make time for your queries and understand the need to break down certain facts and information to ensure everything is understood perfectly. I would highly recommend the company to anyone looking for any type of legal advice”

Gwawr Booth
Portal Training Ltd

PSS has worked with Darwin Gray for many years. We have always received an excellent service. Prompt and professional advice and support.”

Ledia Shabani
Property Support Services UK Ltd

We have used several departments within DG recently and we have been very pleased with an effective, efficient and down to earth service. Very happy thus far and I expect that we will continue to use DG.”

Guto Bebb
Farmers’ Union of Wales

Darwin Gray offer us truly superb services. Very professional, quick and services available bilingually which is very important to us, highly recommend.”

Iwan Hywel
Mentrau Iaith Cymru

My “go to” in urgent and time sensitive cases for direction, support and advice. The team are quick to respond to calls or emails for advice and support on all matters. Always explain complex matters in a way a lay person can easily understand.”

Margot Adams
Guarding UK Ltd

Darwin Gray have acted for myself and my company over a number of years and at all times we have been treated with a professional manner yet maintain a common-sense approach at all levels. We couldn’t recommend them more highly.”

Simon Baston
Loft Co

We have been clients of Darwin Gray for many years; they’ve always dealt with all of our legal matters with such professionalism. They work around us, even during awkward hours, and we feel confident we can always rely on them.”

Louise Williams
ACT Training

Darwin Gray has been acting for Siltbuster for more than ten years. We would have no hesitation in recommending Darwin Gray to other organisations small or large.”

Richard D Coulton
Siltbuster Ltd

From the very first conversation, I had no doubt that Darwin Gray should be the firm to receive our instructions on this matter. I would have no hesitation in recommending Darwin Gray.”

Sandra Warr
Tomos TV

We regularly instruct Darwin Gray. Their service in dealing with our transactional matters and disputes is always professional, prompt and efficient.”

John Poppleton
Absolute Property Management Solutions Ltd

Darwin Gray guided me through a long and extended process that would have been much more difficult had it not been for their patience and constant support.”

Ifan Lewis

Excellent and efficient service. Great result achieved, highly professional and transparent on pricing. Would recommend.”

David Stevens

Superb legal service provided. Exceeded expectations. They went above and beyond in order to provide the best service possible.”

Huw Pickrell

Very professional and understanding. They were a calming influence in a very troubling situation and they brought it to a very successful conclusion”

Rachel Jones

We have used Darwin Gray and have been seriously impressed. The personal approach is what Darwin Gray are excelling on and is the reason why we will continue to work with them in the future.”

Cadwyn Housing Association