When working as an independent contractor you may find yourself facing difficulties, legal issues and questions of liability. For these reasons you should know some basic laws regarding independent contractors.
One of the most important things you need to understand is whether or not you officially qualify as an independent contractor according to the HMRC. Independent contracts are seen to be different to employees and can often play less tax – resulting in a higher net pay. The main variance is that an employee works under a contract of service whereas an independent contractor works under a contract for services.
Fewer rights, but better pay!
As a result of these differences, independent contractors do not have the same rights as an employee. But as an independent contractor, you don’t need the protection of employee rights – contractors generally earn more than employees and can enjoy flexible time frames. A good contractor with some decent marketing can actually obtain better job security by contracting their services to several different satisfied companies.
Independent contractors are employed for their services with specific details of time span, project scope and services required, all set out in an official contract at the beginning of the project. The point of the contract is to set out in legal terms what work is to be done and how much will be paid for the services.
Go out of your way
However, no matter how lengthy and complete a contract may seem, there may be things that you could be asked to do outside of the contract. Although there is no legal contract to carry out these requests it is good practice to try meet them, within reason. Don’t fold to every request, use your common sense – don’t unnecessarily upset the client by not doing something but also don’t do everything they ask without question.
Stop problems before they start
Prevention is the best cure – if you notice something in your contract that you don’t like before you start work then talk to the agency and try negotiate your terms. Starting work on a contract you want to change weakens your negotiating position and can result in you not being paid for any work you’ve done if the contract is terminated.
A terminated contract is something that no independent contractor wants to do, and unfortunately, a contractor doesn’t enjoy the same employee rights against discrimination or harassment. The best way of ameliorating a situation comes by discussing issues with the client and trying to come to an agreement.
If you do feel aggrieved by a decision, independent contractors can take cases to an employment tribunal, but this could jeopardise your status as a business-to-business service provider – bringing legal repercussions and having costly tax implications. Beyond the tax issues, tribunals can also seriously harm your reputation and almost certainly will terminate your current and future contracts with the client.