Dragonfly Consulting Limited (2009)

1. Ensure your contracts are accurate and consistent

It makes little sense having a contract which states that you will be subject to the control of the client, or that the client's processes and procedures will apply to you when they don't in practice.

In addition, make sure that the upper level contract (i.e. the contract between the agency and the client) does not contain anything which contradicts your contract with your agency or the way you intend to work on the assignment.


2. Make sure your client thinks the same way you do

If your client sees you as an extension of its own workforce, the company is more likely to control what you do and treat you as an employee. Make sure they know that you are engaged for a specific reason and that they treat you accordingly - throughout your assignment. If the client has more work for you, make sure you put a separate contract in place.


3. Ensure that the client’s representative views you as an independent consultant - not just part of the employed workforce

This is particularly important where your client representative is different from the individual who hired your services at the outset of the project. If necessary, provide a copy of your contract to the client representative to avoid any misunderstandings regarding the extent of the services you are providing.


4. Demonstrate that you are treated differently from your client’s employees - both in terms of the services you provide and how you perform them

Different pay and benefits will not be enough on their own. Flexible working, assignments for other clients, investing in your own training, development and equipment, working on a specific package of work for a fixed fee and/or a fixed period, is all good ways of showing that you are truly independent.


5. Working as part of a team does not automatically render you a disguised employee of the client

However, it is essential that you agree the scope of the work you undertake at the outset of the assignment. Being continually allocated further work by the client - particularly without putting in place additional contracts - could show that you are being treated as an employee. If further work comes up, make sure you put a contract in place before you start working on it. Quote a fixed price or overall fee estimate up front wherever you can.


6. Provide a substitute

Not only does providing a substitute give unequivocal evidence that you are not obliged to offer a personal service, and therefore cannot be a disguised employee, it can also enable you to profit further from the assignment by supplying cheaper labour to perform the services on your behalf.


7. Project based assignments are significantly better than period based ones

Being engaged on a specific project enables you to quote a fixed fee and work flexibly as long as deadlines and project completion dates are met. However, being engaged on an ongoing basis may suggest you are only there until the client recruits a permanent employee to do your job. This may indicate that the company is treating you as if you were that individual until someone permanent comes along which can potentially make you a disguised employee.


8. Manage your own assignments

Employees are generally contractually obliged to give up their time for a fixed number of hours each day/week, but as an independent contractor, you should determine the hours required to complete the work. It is important that you take control over managing your assignments and don’t rely on being allocated work. This should also enable you to quote a fixed fee for the project and/or undertake work for other customers along side this assignment.


9. Calling yourself a contractor and not receiving holiday or sick pay are not enough on their own to prove that you are not an employee of the client

Your working practices and other terms of the contract must indicate that you are self employed. This could involve you showing that you have financial risk in terms of bad debts, rectify work at your own cost and invest in your company - all good ‘badges of trade’.


10. Working for multiple clients and investing in your own company is still a good way of demonstrating that you are in business of your own account

The more clients you work for, the easier it is to demonstrate that you are self employed, whereas only having one client as your sole source of income for a lengthy period may suggest that you are employed by the end client. To counteract this, pay for your own training, provide as much of your own equipment as possible and advertise your services in trade magazines or the Yellow Pages.

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