Self-employment

Employee, worker or self-employed?

Your employment status dictates your rights, entitlements and determines your employer's responsibilities.

Confusion may arise because employment status can be different under tax law and employment law. It is possible that you may be regarded as self-employed for tax purposes by Her Majesty's Revenue and Customs (HMRC), but as a worker or an employee by an employment tribunal (industrial tribunal in Northern Ireland). More information on tribunal tests can be seen below.

At Gov.uk you can read more about your employment status, for example, worker, employee or self-employed.

A self-employed person does not have the same employment rights and responsibilities as an employee or worker. Instead, rights and responsibilities are set out in the contract for services in place with the other party. Please note that a contract for services is not the same as a contract of employment.

If you have a contract with an agency, see our advice guide for agency workers.

A tribunal or court can make a final decision on employment status (that is, whether you are genuinely self-employed, a worker or an employee). They will look at the employment relationship in practice between both parties, including: 

• Whether the company is under an obligation to provide you with regular work, and you are under an obligation to make yourself available to do the work.
• Whether you are required to provide your services personally. Can you appoint a substitute, or do you need the company's approval?
• Whether you are under the control of the company to such an extent that the company is your 'master'. In other words, the company controls what you do, how you do it and when you do it.

The number of RCN members choosing to work as nurse entrepreneurs is increasing and all the indications are that - given the current and proposed developments in health and social care particularly in England - these numbers will continue to rise.

You should always seek expert advice on which legal business structure is right for you. You may also need to source ways of developing your business and marketing skills.

The following organisations provide independent and impartial advice and can answer questions on how to write a business plan, plus starting (and running) a business.
England - National Enterprise Network
Scotland - Business Gateway
Northern Ireland - NI Business Info
Wales - Business Wales

Go to Gov.uk for information on how to set up a social enterprise, start your own business and self-assessment tax returns.

There are no specific legal or professional restrictions to setting up in private practice and offering services as a registered nurse, nursing associate or midwife. You will remain bound by the standards set by the Nursing and Midwifery Council (NMC) in the Code. 

"You must make sure that any advertisements, publications or published material you produce or have produced for your professional services are accurate, responsible, ethical, do not mislead or exploit vulnerabilities and accurately reflect your relevant skills, experience and qualifications."

You also need to consider whether you (or your business) come under the regulation of any other regulatory body such as the Care Quality Commission. For example, earwax removal treatment is a regulated activity that must be registered with the CQC if the treatment is carried out by a listed health care professional (this includes registered nurses). Failure to do so is a criminal offence which could result in a fine or imprisonment.

The Health and Safety Executive provides details of the health and social care regulators in the UK and provides links to the relevant organisations.

Been referred to the NMC?

See our guide NMC: Fitness to Practise concerns

As a registrant you are required by the NMC to confirm that you have appropriate indemnity cover arrangements in place to cover your practice. If you are self-employed, you must ensure that you have sufficient indemnity arrangements in place. This should reflect the risks associated with your scope of practice, so that it is sufficient in the event that a claim is successfully made against you.

If you are genuinely self-employed, the RCN indemnity scheme may apply, providing you meet the scheme's terms and conditions. You can read our indemnity FAQs and the indemnity scheme document for further detailed information.

The success of your business may depend on maintaining your professional reputation and registration. You must not do anything that could jeopardise standards of practice or put your clients/customers/patients or NMC registration at risk. 

The types of paperwork you need to keep will depend on the type of business you are running and who you provide your services to.

Before you start work as a self-employed professional, we recommend that you find out how the arrangements will work in practice. In particular, clarify (and keep written proof of) the following:

• how long the contract will last for, or if it is open-ended
• arrangements for booking/cancelling work
• where you are to undertake the work, and for whom
• who is responsible for providing the equipment you’ll need to provide your service
• how you’ll be paid, and how often
• how you are to pay tax/National Insurance and other standard deductions
• substitution clauses/requirements – can/will you arrange someone else to carry out the work on your behalf if you can’t do it personally? 

The RCN is unable to offer advice on how much you should charge for your services. This will be dependent on local market conditions and other factors. See the websites and helplines in the starting your own business section above to find support in your area, including help with developing business ideas.

The RCN can provide local support to try to assist with the recovery of earnings arising out of a breach of contract between your self-employed company (or partnership) and another organisation.

You should try and obtain the monies first by following these steps:

Letter template

(Enter name of business/agency name)
(Enter name of business/agency address)

(Date)

Dear (enter name),

I am writing to you because I am concerned that you have not made the correct payments in accordance with the contract dated (enter date) and my invoice dated (enter date).

I/my company (am/was engaged) by you from (enter date) to the (enter date) as a (enter position) on a (enter job type – self employed full time, part time or agency/casual) basis.

There is an underpayment of £(enter sum) for the period from (enter date) to (enter date) as a result of:

(Specify the full details of your claim and how it occurred - for example):

• non-payment or partial payment of invoice
• incorrect rates of pay etc.

(Specify any monies incurred as a result of the underpayment - for example):

• bank charges (include proof)
• mortgage charges.

I understand that mistakes can happen, but I hope we can resolve this as soon as possible without any further action.

Please could you respond to my claim and remedy this within a reasonable time. I wish to be paid the outstanding money owed to me within 5 working days of this letter (if you are in financial difficulty amend accordingly).

Kind regards,

(Enter your name and contact number)
(Enter your address)

<End of template>

RCN support with formal legal action

If you are genuinely self-employed then you are unlikely to be a worker or an employee. An Employment Tribunal will not have jurisdiction to hear a claim from you if you have a dispute about monies owed unless you are a worker or an employee. However, you may be able to bring a breach of contract claim via your local court service, most of whom will offer an online claims portal:

• Make a court claim for money (England and Wales)
• Recover debts owed to you (Northern Ireland)
• Make a court claim for money (Scotland)

The RCN Legal team can support members with court claims for the recovery of earnings arising out of a breach of contract subject to:

• the claim being assessed as having over 51% prospects of success and
• the net value of the claim being over £10,000 in England and Wales, and over £5,000 in Scotland and Northern Ireland.

The RCN does not provide advice or representation on other commercial matters arising out of the self-employment relationship, such as shareholder disputes, loans, tax advice, restrictive covenants or disputes around assets/information/staff.

If your case does not meet our terms of support, you can of course pursue this matter yourself if the sums are above the small claims threshold. Please note there are strict time limits for pursuing breach of contract claims and you are responsible for ensuring your claim is submitted on time.

You may find it useful to visit and join the RCN Nursing forums. By contributing to the online community of your speciality, you can seek guidance from RCN members working in your field.