Services for Contractors

Legal structures for contractors

Deciding on a suitable legal structure for working as a self-employed person should be one of your first tasks when starting out as a contractor. Following the introduction of IR35 in 2000, there are now a range of company structures that can be used. The decision as to which structure to use will depend on various factors, including whether or not your contracts are likely to fall within the IR35 rules.

What is a contractor?

A contractor is a person or business that provides goods or services to another entity under terms specified in a contract. Unlike an employee, a contractor does not work regularly for a company. They can also be called an independent contractor. Examples of contractors can be Truck Driver, IT Specialist, Dentist, GP, Courier, Engineer, Taxi Driver, etc.

A contractor provides services to a specific client under specific terms. A contractor, however, can either be classed as:

• A worker or an employee, if they work for a client through an umbrella company or agency. In this case the umbrella company/agency is their employer, not the client.
• Self-employed, if they are a sole trader or have a limited company of their own.