Essentiality of a Written Contract for Services

Should the contract move from (ie be prepared by) the hirer / "employer"?

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Facts of the case: Client's business supplies hands-on labour to musical festivals, events, and premier league football clubs. Stage-shifting, advertising hoarding changing, and general hands-on labour. All hired-hands are "self-employed" at circa £13 hour, and each fills in a pre-templated "invoice" supplied by the client for their services: hours worked, hourly rate, name and address. Over each year such labour amounts to a six-figure figure.

Principles of law involved: There are no written contracts for services. By any measure, the "workers" are employees; whether by the HMRC's evaluator or by any application of employment law.

Question to the Panel: How usual is it for a contract - in this case a contract for services (as opposed to a contract of service, ie an employment contract) - to be prepared by the hirer? From my perspective, a written contract for services might just bolster up the hirer's contention that his workers are self-employed.

Footnote: FWIW I don't believe the client has a leg to stand on either way. And it's something of a moot point anyway, as in any event we disengaged the company earlier this week. So I guess the real question is whether instigating contracts for services that move from the hirer ("employer") might have added any weight to the client's cause; or whether any such contracts must, in order to be effective, move from (ie be supplied by) the alleged self-employed person?  

  

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By taxdigital
04th May 2024 12:29

I'msorryIhaven'taclue wrote:

Question to the Panel: How usual is it for a contract - in this case a contract for services (as opposed to a contract of service, ie an employment contract) - to be prepared by the hirer? From my perspective, a written contract for services might just bolster up the hirer's contention that his workers are self-employed.

 

Depends. Micro and nano entities may prefer taking all the risks rather than having to part with some cash on agreements and other documentation.

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By I'msorryIhaven'taclue
05th May 2024 13:51

Thanks TD. In my simple world contracts for services are prepared by the self-employed party. The entire concept of the hirer preparing such a contract is foreign to me.

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paddle steamer
By DJKL
06th May 2024 16:03

My worry here would be insurance- what HMRC etc might consider the employment position is going to be as nothing compared with the legal position if someone gets seriously injured when on client's site and maybe they are not either an employee or a contractor- I know our insurers would be insisting we/they checked each "contractors' " insurance cover before they stepped foot on one of our properties. Also risks if public hurt due to actions of these contractors/employees.

This sounds a typical ill thought out client bodge ripe with danger and of course it is no good considering the issues after something has happened, client and its officers by then potentially firmly in the frame (civil and criminal)

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By I'msorryIhaven'taclue
06th May 2024 16:58

Thanks DJKL, it's certainly ill-conceived.

The client supplies his "self-employed" workers with invoices that they fill in for their name, address, hours and rate (so overall it looks a little like an employee's timesheet).

It was the self-employed contracts that had me flummoxed. I've self-employed clients - carers for example - who supply their end customer with a contract for services. But I've never really contemplated it in reverse, whereby the hirer prepares the contract for services and presents it to the self-employed person.

It all sounds too close to employment, and a contract of service. That's why we fell out, the client and I.

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By CardiffAccountant
11th May 2024 05:24

My take on this is that what matters is what is actually happening, not what pieces of paper have or have not been signed. If it looks like a duck…

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