Consultancy Agreement vs Employment Contract — Which Do I Need?

Getting this wrong can trigger IR35 problems, unexpected tax bills, and employment tribunal claims. Here's how to decide.

The distinction between a consultant and an employee matters enormously for tax, employment rights, and regulatory compliance. Getting it wrong is expensive.

An employee works under your control and direction. They have set hours, use your equipment, cannot send a substitute, and are integrated into your organisation. They are entitled to statutory employment rights — unfair dismissal protection, SSP, holiday pay, pension auto-enrolment, and parental leave.

Back to Termsmith

Loading interactive view…