Employee vs Contractor

The legal distinction between someone who works for you as an employee (with full employment rights) and a self-employed contractor (who manages their own tax and has fewer rights).

Misclassifying an employee as a contractor, "false self-employment", is illegal and can result in significant back taxes, NI contributions, and penalties.

A founder regularly uses the same designer for 30 hours a week over 6 months and controls how and when she works. HMRC could deem her an employee, even if both parties agreed to "contractor" status.