It is very common for voluntary sector organisations to employ staff on a freelance/self-employed basis, particularly when employees are working on a project for which the funding is on a fixed term basis.

However, a recent article by the Chartered Institute of Personnel and Development (CIPD) described a tribunal case that demonstrates the risks that can arise when incorrectly categorising workers as self-employed. It is becoming clear that HMRC are clamping down on workers incorrectly classified as self-employed.

There are three types of contract available to employers: employee, worker or freelancer/contractor (self-employed) contracts. This article provides useful definitions of the defining characteristics of the different worker categories, and gives advice on what a freelance/self-employed contract should contain.

Sometimes, on close inspection, a person working on a freelance basis should have an employment contract; but a self-employed contract may suit one or both parties for a range of reasons. Therefore, it is advisable that the employer ensures the worker is registered with HMRC as a self-employed contractor or company. That said, this article warns, that HMRC may take a different view on any particular case.

If you have any questions about contractual status you can contact Jane Hamilton, HR Adviser at York CVS. Jane can provide comprehensive and legally-correct contract templates that are in line with best practices in the sector, in order to suit the different types of worker arrangements to meet your organisation’s requirements at very modest cost.