Worker status & pay
What is self-employed?
A self-employed person runs their own business and contracts to provide services. They have very few employment rights, which is why the status is attractive to engagers and scrutinised by tribunals.
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<img src="https://agencyoptix.co.uk/glossary/self-employed/diagram.svg" alt="self-employed — diagram from AgencyOptix" width="880" height="620" loading="lazy">
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<a href="https://agencyoptix.co.uk/glossary/self-employed">What is self-employed?</a> — diagram by
<a href="https://agencyoptix.co.uk">AgencyOptix</a>
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</figure>Genuine self-employment involves real business risk, control over how work is done, the ability to profit from sound management, and a genuine right of substitution actually exercisable.
The label is worth nothing. An arrangement described as self-employment that operates as employment will be treated as employment, with the liabilities that follow.
For an agency the exposure is real: misclassification produces liability for unpaid tax, holiday and other entitlements, usually calculated over a long period.
What goes wrong in practice
- Substitution clauses relied on that have never been and could never be used.
- Status decided by cost rather than by the facts of the engagement.
- No record of how a status conclusion was reached.