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Contractor or Freelancer?

I had two phone calls on Friday from new prospective clients. Nothing unusual in that, but I believe (maybe wrongly) they are both going for the same role or at the very least, working for the same company. What I found strange was that person “A” described herself as a contractor and person “B” described himself as a freelancer. At first glance it would appear they are both the same type of consultant and it only boils down to interpretation. Having now researched this over the weekend, I am not so sure. There doesn’t appear to be an absolute definition of either.

Physically I don’t believe you can determine which is which. It has nothing to do with beards or handbags and has more to do with how they search for their income. If you see one in the street, don’t be frightened – neither class is more likely to harm you than the other. Unlike Lions and Tigers – all part of the genus Panthera, but I would fancy a Lion could beat a Tiger if it came down to it.

So how do you tell them apart?

Firstly – have a look at the contacts on their mobile phone. If it has lots phone numbers of agents, they are a contractor. If it has phone numbers of project managers – they are a freelancer. If they won’t let you look at their phone, rub them under the chin very gently and it should drop into your hand.

Secondly – ask them if the journey to work was difficult this morning. If they look puzzled, they are a freelancer – as freelancers tend to work from home. Instead, you may get a reply that the roads were full of potholes or the train was packed – this makes them a contractor, as contractors tend to work at the clients site. 

Thirdly – ask them what they feel about IR35. If they shrug their shoulders, it is almost certain they are a freelancer. It really only affects Contractors and they have far more interest in IR35 due to it being designed around the principle of a disguised employee.

Regards,
Matthew Durrant

By matthew on August 2, 2011


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