How to Hire Self-Employed Staff?

The world of work has changed—and it’s not just remote jobs and Zoom calls. Workforce structure and composition has also evolved accordingly. Today, self-employed professionals make up a growing and vital part of the UK workforce. From freelance graphic designers to IT consultants, content writers to project-based marketers, hiring self-employed staff can be a smart, flexible, and cost-effective solution for your business.

But how exactly do you hire self-employed staff the right way? What legal boxes do you need to tick? How can you ensure it’s a good fit without the complexities of a full-time employment contract?

This blog will guide you step-by-step through the process of hiring self-employed individuals, ensuring you stay compliant, get the best talent, and build strong, respectful working relationships.

 

Step-by-Step Guide to Hiring Self-Employed Staff

 

1. Understand What “Self-Employed” Means

In the UK, a self-employed person is someone who runs their own business and takes responsibility for its success or failure. They are not entitled to employee rights like holiday pay or sick leave.

The self-employed:

• Submit their own tax returns
• Use their own tools or equipment
• Work for multiple clients
• Decide how and when to work

It’s essential that your arrangement with them does not blur the line between employment and self-employment—or you could be liable for penalties from HMRC.

1. Identify the Type of Work You Need to be Done

Be clear on the scope, duration, and deliverables of the work. Self-employed professionals thrive when there are well-defined expectations.

Ask yourself:

• Is this a short-term or long-term need?
• Is it a one-off project or ongoing work?
• What outcomes am I expecting?

Clear expectations mean better results—and happier freelancers.

 

1. Find the Right Candidate

You can find self-employed professionals through:

• Freelance platforms (like Upwork, Fiverr, PeoplePerHour)
• Industry-specific job boards
• LinkedIn and social media
• Freelancer communities and referrals

Look for: Strong portfolios, verified reviews or testimonials, Good communication skills and, Relevant qualifications (if required).

It’s okay to ask for a short trial task (paid) before committing to a bigger project. You’re not just hiring skills—you’re starting a partnership.

 

1. Clarify Self-Employed Status

Here’s a crucial step many small businesses miss: verifying that the worker is genuinely self-employed.

To protect yourself legally:

• Avoid giving fixed working hours or managing their day-to-day tasks
• Do not provide company benefits (e.g. pension, sick leave)
• Let them use their own tools/equipment
• Ensure they invoice you for the work, rather than receiving regular wages

If HMRC deems your working relationship too similar to employment, you could face tax liabilities and fines. Use the HMRC CEST tool (Check Employment Status for Tax) if in doubt.

 

1. Agree on Terms with a Written Contract

Even though the individual is self-employed, a written agreement is still essential. This is often called a Freelance or Contractor Agreement.

Your contract should include:

• Project scope and deliverables
• Deadlines or timelines
• Payment terms and method
• Intellectual property rights (especially for creatives)
• Confidentiality clauses
• Termination terms

This protects both parties and avoids future misunderstandings.

Also take care to avoid overly legalistic jargon. Make it simple, clear, and mutual.

 

1. Set Up Payment Terms

Since self-employed workers invoice for their work, agree in advance on:

• Hourly/daily/project rates
• Invoice frequency (weekly/monthly/after completion)
• Payment methods (bank transfer, PayPal, etc.)
• Late payment penalties (if any)

Under the UK’s Late Payment of Commercial Debts Act, self-employed individuals are entitled to charge interest on overdue invoices—so it’s wise to pay promptly.

 

1. Maintain a Respectful Working Relationship

Even though they’re not on your payroll, self-employed workers are still human beings contributing to your business success. Treat them with respect:

• Communicate clearly and regularly
• Give constructive feedback
• Acknowledge good work
• Respect boundaries—they are not “on-call” staff

When you build trust, many freelancers become long-term collaborators.

 

1. Handle Tax and Compliance Correctly

As the client, you don’t usually need to deduct taxes for a self-employed individual. They’re responsible for:

• Their own Self-Assessment tax returns
• Paying National Insurance Contributions
• Registering with HMRC as self-employed

However, under IR35 rules, medium and large businesses in the UK must assess whether a contractor falls “inside” or “outside” IR35. If they are “inside,” you must deduct tax and NI.

If you’re a small business (as defined by the Companies Act 2006), IR35 rules typically don’t apply—but it’s good to stay informed.

 

Why Hire Self-Employed Staff?

Before diving into the how, let’s take a quick look at the why.

Hiring self-employed professionals offers several benefits:

• Flexibility: You can bring in talent as and when needed—perfect for project-based work.
• Cost-Efficiency: You save on employer NI contributions, holiday pay, and pensions.
• Specialised Skills: Freelancers often bring niche expertise that might not be available in-house.
• Scalability: You can scale your workforce up or down depending on your business demands.

According to the UK’s Office for National Statistics, over 4 million people in the UK are self-employed—a clear sign that businesses need to understand how to engage with them properly.

 

Common Mistakes to Avoid in a nutshell

Let’s be real—hiring self-employed staff isn’t risk-free. Here are some common mistakes and how to avoid them:

❌ Treating freelancers like employees
✔️ Give them autonomy and avoid micro-managing.

❌ Failing to set clear expectations
✔️ Define deliverables, timelines, and communication methods from day one.

❌ Not having a contract
✔️ Always formalise the arrangement, even for short-term projects.

❌ Over-relying on one freelancer
✔️ Build a network of trusted contacts to spread the risk.

On a concluding note, remember that Hiring self-employed staff in the UK is not just a cost-saving strategy—it’s an opportunity to inject fresh thinking, specialised expertise, and flexibility into your business. When done right, these working relationships can be as rewarding as traditional employment—if not more.

Just remember: clarity, communication, and compliance are the three pillars of a successful freelance engagement.

 

Key Takeaways

• Self-employed individuals are responsible for their own taxes and work independently.
• You must avoid blurring the line between employment and self-employment to stay compliant.
• Written agreements, clear deliverables, and respectful relationships are the foundation of a successful freelance partnership.
• Stay informed about IR35 and HMRC guidelines to avoid unexpected liabilities.

 

Ready to Hire Self-Employed Staff with Confidence?

At Clearpath, we help UK businesses hire self-employed professionals the right way—legally, efficiently, and strategically. From crafting watertight freelance contracts to offering IR35 assessments and compliance checks, we’re your partner in building a modern, flexible workforce.

Contact Us today and let us take the complexity out of hiring self-employed talent.