About 4.18 million self-employed individuals currently work in the United Kingdom — 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 United Kingdom contractors to support your goals abroad.
Hiring independent contractors in the United Kingdom
If you are considering a contractor to be the best option for your company, this is what you need to know before choosing 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.
Penalties for contractor or employee misclassification
When you hire a contractor, you want to avoid misclassifying them. If you incorrectly identify an employee as a contractor, you risk lawsuits, fines, and additional remuneration. Under IR35 rules, misclassified employees may be retroactively entitled to receive benefits for all their years of service.
How to hire 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 United Kingdom 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’ skills sets, available services, and applicable contracts they’ve completed.
2. Ensure legal compliance
Both parties should agree to a 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 these terms with your prospective contractor:
- Pay rates and arrangements
- Services the contractor will provide
- Length of the contract
- Termination conditions
3. Provide orientation
Ensure the contractor feels comfortable and ready to work by providing the necessary training. While contractors typically bring industry-specific experience, you might provide training on your company’s software, workflow, or tools.
How to pay independent contractors in the United Kingdom
Since contractors are not on your employee payroll, you must compensate them separately for their services. Be aware of any restrictions for sending payments internationally. You may need to find a trusted money transfer provider.
While you may often not 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 United Kingdom independent contractors
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.
Even so, you’ll want to ensure you’ve outlined termination procedures in your contract in case you encounter issues with the contractor’s performance or willingness to meet your terms.
Hire contractors in the UK with Globalization Partners
As an extension of Globalization Partners’ Global Employment Platform™, G-P Contractor allows companies to hire anyone, anywhere. Whether you’re hiring employees or contractors, we streamline the process with a single solution for your global workforce. Contact us to learn more.
THIS INFORMATION IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Globalization Partners does not provide legal or tax advice and the information is not tailored to the specific situations of your company or your workforce. Globalization Partners makes no representations or warranties concerning the accuracy, completeness or timeliness of this information. Globalization Partners shall have no liability arising out of, or in connection with, the information, including any loss caused by use of, or reliance on, the information.