Contracts for Service

A Contract for Service is usually issued to an individual who is self-employed or is a contractor.

Distinguishing whether an individual is an employee or a self-employed contractor is not as straight-forward as it may first appear. Employers need to give this careful consideration before offering a contract for services, as a tribunal may take a different view.

The approach of tribunals in deciding whether someone is an employee, a worker or self-employed will be to examine any written contract as well as the factual reality of the working relationship. 

 Although there is no clear-cut answer to this question, if most of the statements below apply to someone, it is likely that they are self-employed:

• Aren’t under direct supervision when working
• Can use someone else to do the work, do not have to do it themself
• Put in bids or give quotes to get work
• Submit invoices for the work they’ve done
• Are responsible for paying their own NICs and tax
• Don’t get holiday or sick pay when they aren’t working
• Have to do unsatisfactory work again in their own time and at their own expense
• Are responsible for losses and taking profits from their work
• an provide services to a number of different clients or customers

Further guidance on this issue can be found here.