Head (Fin.& A/c) M.COM M.A.(Eco) MBA CS
2453 Points
Joined January 2009
An understanding of the types of contracts between clients, agencies and contractors and employees is vital for a contractor to be able to determine whether they are working inside or outside of IR35.
However, the debate over contracts of service and contracts for service has a long history in employment law, as has the employment status of agency workers long before the contracting sector took off and IR35 was introduced.
The fundamental difference is that:
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An employee-employer contract is a contract of service
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A contractor-client contract is a contract for services
In each of these types of contract, both parties have specific rights and responsibilities, which differ according to the type of contract in place.
Contractors should be aware of their rights and responsibilities when they have a contract for services between their limited company or contractor umbrella company and their agency or end-user client.