Page owner: Professional standards director
This guidance is intended for freelancers who are sole traders (one-person businesses). We offer separate advice for freelancers trading as limited companies. We hope that this CIEP guidance, along with our model terms & conditions, will help freelance members resolve any queries or problems with contracts or terms & conditions when dealing with clients in the UK.
It is becoming increasingly likely that a client will send you a contract and/or terms & conditions (T&Cs). This is partly because these documents are used by Her Majesty's Revenue and Customs (HMRC) as an indicator of employment status.
The CIEP has examined a wide range of clients' contracts and T&Cs before drawing up a model set of T&Cs that sole-trader CIEP members can offer to clients who require some sort of formality in the client–freelancer relationship.
Keep as a hard copy or forward to your clients.
Use as a template for your own model contract.
Contract This covers a specific job/project and will include all relevant details, such as:
- material supplied
- material still to come and by when
- tasks to be performed
- delivery date
- fee and payment terms
- expenses to be reimbursed
Terms & conditions (T&Cs) These are general points that will tend to cover the overall working relationship between client and freelancer, and will probably remain the same for each job.
The model below takes account of the guidance on GOV.UK's Employment status web page under Self-employed and contractor. Detailed guidance can be found in the HMRC's Employment Status Manual under ESM0500 - Guide to determining status.
Although your client is responsible for correctly assessing your employment status, it is not a case of their simply declaring that you are not an employee. Your status is based on the T&Cs of your agreement with them.
Maintaining freelance status
It is important that both client and freelancer appreciate that certain practices can endanger the freelancer's status as self-employed – for example, a freelancer working regularly in a client's office at times dictated by the client and while using their equipment. Aspects of self-employment particularly relevant to CIEP members are:
- being able to subcontract work
- working at a time and place decided on by you
- risking financial loss from a job/project (e.g. working for a fixed price regardless of how long the job may take) but having the opportunity to benefit from efficient practices (e.g. invoicing for the negotiated lump sum even if the job has taken less time than you estimated)
- being liable to correct unsatisfactory work in your own time and at your own expense
- providing your own main items of equipment
- having a number of different clients
Remember that each job should be assessed independently, depending on your working practices, as it is possible to be both self-employed and an employee.
If you are in any doubt as to your status, check out HMRC's Employment Status Indicator. This is a free, anonymous questionnaire that will indicate your status provided you answer accurately. It can even be used as evidence but only if it is completed by your client.
If you are classed as an employee, you will not be able to claim tax deductions available to the self-employed, and you will have to pay Class 1 National Insurance contributions (NICs). Your client will be required to deduct income tax and NICs from your fee; these deductions can also be backdated. Your client may also be liable to provide other staff benefits, statutory payments and employment rights – understandably clients are keen not to do that!
Only a little word but it makes such a difference – an employee has a contract of service; a freelancer has a contract for services.
Clients' terms & conditions
Clients may send you their own terms & conditions (T&Cs). In many cases, these documents are straightforward, but some require compliance in areas that the CIEP believes are unreasonable for its membership.
Sometimes the T&Cs sent to freelancers have been adapted from those given to the organisation's employees without considering the implications for editorial freelancers. They may have 'catch-all' clauses that are not suitable for your situation.
Language to look out for:
- 'financial liability'
- 'total responsibility'
You should not agree to this sort of clause. Explain (politely) to the client why it, and any other unreasonable clause, is unfair and ask the client to accept your crossing it (or them) out and initialling/signing against the crossed-out clause(s). Alternatively, just go ahead and do it, send the T&Cs back and put the ball in the client's court to show that you're still negotiating. There are a number of precedents for this.
If you are unsure about something in a contract or T&Cs that a client asks you to sign and which is not covered by this guidance, contact EPOQ for advice.
Points to note
Clients occasionally demand that a freelancer has professional indemnity insurance (PII). If you don't have PII, you could explain that this is not generally necessary in connection with a straightforward job of copyediting/proofreading/project management. However, as with any insurance, you should consider the consequences of not having PII, depending on the perceived risk(s) attached to the project that you are being asked to work on.
The CIEP has a relationship with an insurance broker to provide this type of cover.
Cancellation or curtailment of a project is one of the risks involved in being self-employed. Although compensation for the cancellation of an agreed project is welcome, it is not to be expected by a self-employed person.
Sending out T&Cs
It should not be necessary to send out your T&Cs with every job. It should be enough to send them when starting a job with a new client or if you are unsure or unhappy about a client you are or have been working with.
Clients outside the UK
This guidance document relates only to the UK. We are unable to advise you on negotiations or dealings with an overseas client, so you should determine early on whose laws will apply in the event of a dispute.
Late payment legislation
The Late Payment Act was amended in 2013 to harmonise it with EU directives. Clients can set a credit period of up to 60 days (30 days for public-sector transactions) but that is the maximum and if you are not happy, ask for it to be reduced. If no contract exists, the default credit period is 30 days. The credit period begins on delivery of the goods or services or on receipt of the invoice, whichever is the later.
This guidance was drawn up by former publications director Gillian Clarke and Anne Waddingham, an Advanced Professional Member with experience as both a client and a freelancer, in consultation with FirstAssist (the LawCare Service to which the SfEP then subscribed), copyright and contract consultant Richard Balkwill and Mark Seaman of Sweet & Maxwell.