How to protect yourself as a freelancer

What rights are you entitled to as a freelancer?

Freelancers work for themselves – they are their own boss, find their own contracts and are responsible for their own tax obligations, completing a self-assessment tax return each year.

Because they are not employed by someone else, there will be certain benefits usually found under company schemes that won’t apply to freelancers.

However, as a freelancer, you still have some legal rights at work.

These include:

• Health and safety protection
• Protection against discrimination
• Legal protection by the terms of your contract with the client

What are freelancers not entitled to?

The self-employed sector is an appealing lifestyle choice due to its numerous benefits.

There’s the fact that a freelancer can often earn more than their permanent counterparts, they are able to claim back on business expenses that can help to reduce their yearly tax bill, plus they have more freedom and control over their career.

However, there will be certain benefits you were entitled to as an employee that will no longer apply as a freelancer.

These include:

Sick pay
Statutory sick pay is a benefit that can only be offered to employees of a company, meaning this is something not applicable to freelancers.

This can be worrying for those who are self-employed because illness is something that really can’t be helped.

However, there is the option of applying for Employment and Support Allowance (ESA) – it’s for those who are employed, self-employed or unemployed, who have a disability or health condition that affects how much they can work.

In order to be eligible, you’ll need to have worked as an employee/have been self-employed and paid enough National Insurance (NI) contributions (usually in the last 2-3 years).

Annual leave
Freelancers are not able to take paid annual leave, but, as an upside, you can take holiday whenever you want.

Many employees work for businesses that have busy periods where they’re not allowed to take annual leave during certain months, or there might be a few people wanting to take the same holiday (around Christmas or a bank holiday for example) but the firm can’t allow all of them to be off at the same time.

As a freelancer, you won’t have to worry about such constraints.

It all depends on the industry and the type of freelance work you do, but sometimes it is possible to fit in more work during the lead-up to a holiday meaning you won’t lose out on as much of your earnings.

Or, many freelancers will put money aside to make up for missed weeks.

Parental leave
As with sick and holiday pay, Statutory Maternity Pay (SMP), Statutory Adoption Leave and Statutory Paternity Pay are all provided by an employer, meaning freelancers aren’t able to take advantage of this benefit.

However, there is the option of claiming Maternity Allowance (MA) instead.

To be eligible you’ll need to have been registered as self-employed for at least 26 weeks.

Minimum wage
As a freelancer, you set your own wage, but you might find that you need to negotiate with clients should they have their own idea of what they’re willing to pay for your services.

If you believe this figure is too low then there is nothing put in place legally to make sure the client pays you above a certain amount, because freelancers are not entitled to the National Minimum Wage. It’s up to you whether or not you accept their offer.

Working Time rights
As a freelancer, you also set your own working hours. This means that the Working Time Regulations, which sets a weekly working time limit, does not apply to those who are self-employed.

Umbrella company employment rights

An umbrella company contractor will be entitled to different rights compared to a freelancer.

This is because an umbrella contractor is essentially employed by an umbrella company – the umbrella employs a temporary worker on behalf of an employment agency and the agency will then provide the services of the worker to their clients.

All tax liabilities are worked out for them and automatically deducted from their payslip, unlike a freelancer, who will need to do a tax return themselves.

This means that an umbrella company contractor is entitled to the same benefits as any other UK employee.

This includes:

• Statutory maternity/paternity pay
• Statutory sick pay
• Annual leave
• Pension scheme enrolment
• National Minimum Wage
• Working Time Regulations

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