Using Freelancers? What Small Businesses Should Review
If your business regularly uses freelancers or contractors, now is a useful time to check whether your agreements describe the way the work actually happens.
On 14 October 2026, the government published a consultation on employment status reform and protections for the self employed. It raises important questions for small businesses that rely on independent people to deliver their services.
These are proposals, not new rules already in force. My view is that the useful response is to gather evidence about your working arrangements and identify anything that needs professional review.
What has the government proposed?
The official consultation considers changes to the employment rights framework, including less emphasis on personal service when determining worker status, a presumption of worker status and stronger protections for genuinely self employed people.
One proposed approach would give control greater weight alongside personal service. That matters where an agreement allows someone to send a substitute, but the business exercises significant control over how the work is performed.
The proposed presumption would place the burden on the engager to demonstrate genuine self employment. The consultation also covers written statements, blacklisting protections and health and safety.
The government’s parliamentary statement confirms that the consultation closes on 8 January 2027. Owners can contribute evidence about how the proposals would affect their businesses.
Employment rights and tax are separate questions
The consultation concerns employment rights in England, Wales and Scotland. Northern Ireland requires separate consideration. The proposals expressly exclude the separate employment status framework for tax.
Owners should therefore avoid reading this announcement as an immediate change to IR35 or a new tax bill. Equally, describing someone as self employed for tax purposes does not, by itself, settle their employment rights.
Existing Acas guidance on employment status explains that status depends on the agreement and the actual working relationship. That distinction is relevant today, regardless of how the consultation develops.
Start with the work, then examine the agreement
My starting point would be a simple operational question: could you explain to an independent adviser how each regular contractor actually works with your business?
It is easy for arrangements to evolve. A freelancer may begin with a defined project, then gradually become involved in recurring work, internal meetings and day to day delivery. The original agreement may remain untouched while expectations change.
A useful review records those changes accurately. It should help both parties understand their position and give an adviser the information needed to assess any uncertainty.
Five checks before your next contractor agreement
1. List the relationships your business relies on
Record each regular contractor, the service provided, the agreement in use and the person who manages the relationship. Include how long the arrangement has operated and whether its scope has changed.
This also reveals operational dependence. If one individual became unavailable, which customer commitments would be affected?
2. Compare the paperwork with everyday practice
Document how assignments are offered and accepted, schedules agreed, fees negotiated and instructions communicated. Record what happens when someone cannot undertake an assignment.
Acas guidance on self employment identifies considerations such as responsibility for how and when work is done, working for different clients and the ability to send someone else. It also advises that the contract should reflect the relationship in practice.
These questions help collect evidence. They are not a scoring system that automatically determines legal status.
3. Give an adviser the full picture
Where you find uncertainty, provide an appropriately qualified employment adviser with the agreement and examples of actual working arrangements. Explain how decisions are made, rather than relying only on the label used in the contract.
Any tax questions should receive appropriate tax advice too. Keep the two assessments clear.
4. Understand the commercial consequences of change
If professional advice identifies a need to change an arrangement, model the practical consequences before making promises to customers. Consider capacity, availability, delivery costs and responsibilities.
This connects with the wider decision explored in whether to recruit, outsource or wait. The right structure needs to support reliable delivery as well as the business’s finances.
5. Contribute practical evidence to the consultation
If the proposals affect your business, explain the real arrangements involved and where additional clarity would help. Specific examples of genuine independent working will be more useful than a general objection to regulation.
Avoid disclosing confidential information about individuals or customers in a public response.
What owners should avoid assuming
Genuine independent contracting remains a legitimate arrangement. The consultation recognises that substitution can play an appropriate role. The outcome is not predetermined, and owners should not assume that every freelancer must become an employee.
Nor should a business rewrite a clause and assume the underlying issue is resolved. Any agreement needs to describe a working relationship that actually exists.
For the broader employment timetable, see our separate guide to employment law changes for small employers.
My view: understand the arrangements your business depends on
A growing business should be able to explain who makes decisions, what independence each person has and how responsibilities are shared. That clarity helps owners plan capacity, communicate expectations and recognise when specialist advice is needed.
The most useful action today is to create an honest record of your working arrangements. It gives you a stronger starting point for decisions now and for any future reform.
By Julian Frincu. Published 15 October 2026. This article provides business management commentary, not an individual legal status assessment. The reforms discussed remain proposals subject to consultation.
Sources
Julian Frincu
Founder of Skills 2 Grow, supporting start-ups and customer experience.
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