About 4.18 million self-employed individuals currently work in the UK — a number that has grown significantly over the past three decades. From diverse expertise to specialized skill sets, this workforce pool has much to offer your company. Leverage a strong strategy for hiring UK independent contractors to support your goals.
Working with independent contractors in the UK
If you are considering an independent contractor to be the best option for your company, here are a few things to know before engaging an independent contractor in the UK:
Differences between an employee and an independent contractor
Independent contractors differ from employees because they are technically providing a service to your company rather than being a legal part of your organization. Classified as self-employed, contractors typically do not receive paid time off or other benefits. Independent contractors should be supplying invoices for services carried out and are in turn responsible for their own tax contributions. These individuals should not be subject to the control or supervision of the company or integrated into the business.
Penalties for contractor or employee misclassification
When engaging a contractor, it is important not to misclassify them. If a company incorrectly identifies an employee as a contractor, it risks lawsuits, fines, and additional remuneration. Misclassified employees may be retroactively entitled to receive benefits for all their years of service.
How to retain the services of an independent contractor for your company
As you prepare to bring independent contractors to your company, make sure they feel engaged in the work environment and equipped to handle their duties. Whether contractors are working on-site or remotely, short-term or long-term, you can follow some best practices to ensure contractors can deliver the expected results:
1. Find the right contractor.
Contractors in the UK typically provide CVs that apply to specific project capabilities and skills. Keep in mind that you are conducting a business-to-business transaction rather than hiring an employee. In the interview process, focus on contractors’ skill sets, available services, and applicable contracts they’ve completed.
2. Ensure legal compliance.
Both parties should agree to a business-to-business contract to establish a consistent working relationship. While you are not legally required to provide benefits such as sick pay and pensions, you should cover the following terms with your prospective independent contractor:
- Pay rates and arrangements
- Services the contractor will provide
- Length of the contract
- Contract termination conditions
3. Provide orientation.
Ensure the contractor feels comfortable and ready to work by providing the necessary training. While independent contractors typically bring industry-specific experience, you might provide training on your company’s software, workflow, or systems, if appropriate.
An important step in engaging the services of independent contractors is understanding how to work with them. Independent contractors should not receive the level of control or supervision that employees do — they are generally free to perform the work according to their own schedule and methods.
How to pay independent contractors in the UK
Since independent contractors are not on a company’s employee payroll, you must compensate them separately for their services generally via a bank transfer. Be aware of any restrictions for sending payments internationally. You may need to find a trusted money transfer provider.
While you won’t be responsible for covering benefits or taxes, you may be required to withhold taxes from your contractors in select situations. It’s important to verify that you meet requirements for your specific company and contracting classification. In any case, you do need to meet remuneration conditions agreed upon in your contract, including payment rates and payment schedules.
Termination or extension terms for independent contractors in the UK
Contractors typically work for a set duration of time or on a project-by-project basis, so termination conditions should be straightforward in most cases. You and the candidate have legal freedom regarding termination and extension, whether you renew the contract by a specific date or end services after a project is complete, and these terms should be included in the services contract.
It is important to ensure that termination procedures are outlined in the services contract in case you encounter issues with the contractor’s performance or willingness to meet terms.
Turn to G-P when hiring independent contractors in the UK.
As a part of our #1 suite of global employment products, G-P Meridian Contractor™ allows companies to hire and pay global contractors faster, with self-service workflows and a wide set of flexible payment options. Whether you’re hiring employees or contractors, our platform streamlines the process with a single solution for your global workforce.
Contact us to learn more.