Legal requirement for a written contract for freelancers?

[tbon]

Hi All, I work as a freelance software engineer via my limited company. I work for my clients directly, so no employment agencies or umbrella companies are involved. My clients are limited companies and a project can last from a few days to a few months, completely random. Is there a legal or HMRC requirement to have a written contract between my company and the client? I'm not concerned about resolving a potential dispute, in which case a written contract might come useful. My question is about the legal aspect. For example, can HMRC require my written contracts in case of a tax or IR35 check?

 

[Newchodge]

Hi All, I work as a freelance software engineer via my limited company. I work for my clients directly, so no employment agencies or umbrella companies are involved. My clients are limited companies and a project can last from a few days to a few months, completely random. Is there a legal or HMRC requirement to have a written contract between my company and the client? I'm not concerned about resolving a potential dispute, in which case a written contract might come useful. My question is about the legal aspect. For example, can HMRC require my written contracts in case of a tax or IR35 check?

I am unaware of any employment type relationship that requires a written contract. There always IS a contract as you do the work and they pay you.

 

[Paul Kelly ICHYB]

The contract is a legal thing, not HMRC.

To enter into work without one is a car crash waiting to happen.

In that contract or Terms of Engagement, you can specify/clarify the employment relationship/style.

 

[IanSuth]

I am unaware of any employment type relationship that requires a written contract. There always IS a contract as you do the work and they pay you.

Actually agency/worker does legally require a contract and it's particulars are laid out in law as well - as well as all the stuff that came out with IR35 and carefully writing contracts so people are or aren't in it etc there is this from the conduct regs

Provision of information to work-seekers and hirers​

21.—(1) Subject to paragraph (3), an agency or employment business shall ensure that at the same time as—

(b)it offers a work-seeker a position with a hirer—

(i)it gives to the work-seeker (whether orally or otherwise) all information it has been provided with about the matters referred to in paragraphs (a) to (e) and, where applicable, paragraph (f) of regulation 18; and

(ii)in the case of an employment business that has not agreed a rate of remuneration in accordance with regulation 15(d)(i), it informs the work-seeker (whether orally or otherwise) of the rate of remuneration it will pay him to work in that position.

(2) Where any of the information referred to in paragraph (1) is not given to the work-seeker or hirer, as the case may be, in paper form or by electronic means at the time referred to in paragraph (1), the agency or employment business shall confirm such information in paper form or by electronic means to the work-seeker or hirer, as the case may be, as soon as possible and in any event no later than the end of the third business day following the day on which it was given to the work-seeker or hirer in accordance with paragraph (1)

The matters referred to in 18(a) to (e) are these

(a)the identity of the hirer and, if applicable, the nature of the hirer’s business;

(b)the date on which the hirer requires a work-seeker to commence work and the duration, or likely duration, of the work;

(c)the position which the hirer seeks to fill, including the type of work a work-seeker in that position would be required to do, the location at which and the hours during which he would be required to work and any risks to health or safety known to the hirer and what steps the hirer has taken to prevent or control such risks;

(d)the experience, training, qualifications and any authorisation which the hirer considers are necessary, or which are required by law, or by any professional body, for a work-seeker to possess in order to work in the position;

(e)any expenses payable by or to the work-seeker;
and

(f)in the case of an agency—

(i)the minimum rate of remuneration and any other benefits which the hirer would offer to a person in the position which it seeks to fill, and the intervals at which the person would be paid; and

(ii)where applicable, the length of notice which a work-seeker in such a position would be required to give, and entitled to receive, to terminate the employment with the hirer.

 

[Newchodge]

Actually agency/worker does legally require a contract and it's particulars are laid out in law as well

Provision of information to work-seekers and hirers​

21.—(1) Subject to paragraph (3), an agency or employment business shall ensure that at the same time as—

(b)it offers a work-seeker a position with a hirer—

(i)it gives to the work-seeker (whether orally or otherwise) all information it has been provided with about the matters referred to in paragraphs (a) to (e) and, where applicable, paragraph (f) of regulation 18; and

(ii)in the case of an employment business that has not agreed a rate of remuneration in accordance with regulation 15(d)(i), it informs the work-seeker (whether orally or otherwise) of the rate of remuneration it will pay him to work in that position.

(2) Where any of the information referred to in paragraph (1) is not given to the work-seeker or hirer, as the case may be, in paper form or by electronic means at the time referred to in paragraph (1), the agency or employment business shall confirm such information in paper form or by electronic means to the work-seeker or hirer, as the case may be, as soon as possible and in any event no later than the end of the third business day following the day on which it was given to the work-seeker or hirer in accordance with paragraph (1)

The matters referred to in 17(a) to (e) are these

(a)the identity of the hirer and, if applicable, the nature of the hirer’s business;

(b)the date on which the hirer requires a work-seeker to commence work and the duration, or likely duration, of the work;

(c)the position which the hirer seeks to fill, including the type of work a work-seeker in that position would be required to do, the location at which and the hours during which he would be required to work and any risks to health or safety known to the hirer and what steps the hirer has taken to prevent or control such risks;

(d)the experience, training, qualifications and any authorisation which the hirer considers are necessary, or which are required by law, or by any professional body, for a work-seeker to possess in order to work in the position;

(e)any expenses payable by or to the work-seeker;

Whether orally or otherwise?

 

[IanSuth]

Whether orally or otherwise?

Generally if you had it on a window/newspaper advert or told them you now have to confirm in writing either by paper or email is what i was told that means - so it is all confirmed in a single document basically, other legislation means that is a doc called the "particulars of assignment" note

Stops the advert in window saying "up to £20ph" you work a week and get paid £15 per hour as that is "up to" and you can't easily prove what was said up front exactly

 

[ethical PR]

Hi All, I work as a freelance software engineer via my limited company. I work for my clients directly, so no employment agencies or umbrella companies are involved. My clients are limited companies and a project can last from a few days to a few months, completely random. Is there a legal or HMRC requirement to have a written contract between my company and the client? I'm not concerned about resolving a potential dispute, in which case a written contract might come useful. My question is about the legal aspect. For example, can HMRC require my written contracts in case of a tax or IR35 check?

I would never work for a client without a written contract covering payment terms, scope of work, process for managing disputes etc. You don't need one legally but I think it's foolhardy for any freelance to operate without one.

 

[fisicx]

You need a contract to avoid controversy, and the courts thrive on controversies.
You need a contract with both parties' signatures, even if it is 1 paragraph long.

No you don’t.

 

[paulears]

I suppose some times you might issue a contract to the person who needs work done, stipluating your terms, and they might issue one to you detailing their terms, and you both sign and return, but in my world you email or whatsapp the other party, ask if they are free for a job at X on Y. They respond and say yes, how much? You reply and tell them it's £X. They then ask what time the start is, and ask for more money because it's early. IF it's a long way away they might ask if you are organising accomodation, and finish with "30 days?" and I respond with yes, or perhaps even earlier with this client.

That's it, and is a contract - something that could be presented to HMRC or a court.everything needed is there - when, where, how much, expected length, payment terms and details of subsistence. I bet an enormous amount of sub contracted work is done like this. I often forget to make a note of what I've asked for or said, and go back to the emails or whatsapps.

 

[numbersrule]

A written contract is an opportunity to state your company's Limit of Liability. The significance of this may depend on what your software is used for and what risks your work exposes your company to.

 

[helios]

I apologise for jumping into the thread, but what happens in the case where there are no written contract or any written terms&conditions and later on you notify the customer that from now on we are updating the T&Cs and you must agree or we cannot carry on supporting you? Is it possible if notice is given?

 

[Newchodge]

I apologise for jumping into the thread, but what happens in the case where there are no written contract or any written terms&conditions and later on you notify the customer that from now on we are updating the T&Cs and you must agree or we cannot carry on supporting you? Is it possible if notice is given?

What kind of service/product do you supply?

 

[helios]

I supply SaaS and websites

 

[fisicx]

There was a lot of discussion about this a year or so ago when a big tech company did just this. They were taken to court as the new terms changed the service that had been sold.

For example, you change the saas so instead of unlimited seats you now require payment per seat. Or you change a 24/7 support service to office hours only.

 

[helios]

So what is the best option for this situation? Striking off the company and start a new one.

 

[fisicx]

Not really sure I understand the question. What in your Terms is changing that would cause a problem?

 

[helios]

Not really sure I understand the question. What in your Terms is changing that would cause a problem?

I have a couple of customers that insist they dont want to pay because I dont have a written contract with them saying they need to pay monthly

 

[fisicx]

Just stop the service. If they complain tell then there isn’t a contract they says you need to provide. If they want to play a game so can you.

 

[helios]

Just stop the service. If they complain tell then there isn’t a contract they says you need to provide. If they want to play a game so can you.

Is it that simple? Cant they take my business or me personally to court for taking down a service that they paid once 1-2 years ago?

 

[fisicx]

They can try but unless they can show the court a document saying you agreed to the service in perpetuity they don’t have a case.