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If you’re just starting out as a freelance trainer or setting up your own training business, you may be wondering where to start. What do you have to do and what are nice-to-haves but not essential? In this week’s blog, I’ve put together a list of eight legal issues I think every freelance trainer needs to consider and address. They may not all apply to you, but the chances are that most of these issues will. I should point out that I’m not a legal professional and the information in this article isn’t intended to act as or replace advice from a solicitor about your legal responsibilities.
If you are new to self-employment, one of the first decisions you will need to make is the structure of your business.
If you plan to work alone as a freelancer or only take on a small team, you may want to start out as a sole trader. This means that you can:
- run your business as an individual
- keep all of your business’s profits after you’ve paid tax on them
- employ staff
As a sole trader, you should also be aware that you are personally responsible for any losses your business makes. You should submit an annual tax return to HMRC.
You may decide that you would prefer to operate as a limited company. As a limited company, your business is responsible for everything it does in its own right and its finances are viewed as separate to your personal finances. Any profits a limited company makes are owned by the company after it pays corporation tax. The company can then share its profits.
As a limited company, you would need to register your business with Companies House, put together statutory accounts, send an annual return to Companies House, and send HMRC an annual Company Tax Return.
If you expect your company takings to exceed £82,000 a year, you must register for VAT.
Other options include ‘Ordinary’ business partnerships and limited partnerships.
To find out more about the best structure for your training business, visit https://www.gov.uk/business-legal-structures/overview
There’s something about proposing a written contract that seems to make some freelancers and clients feel uncomfortable. As a result, work is often arranged fairly informally with a telephone conversation. Although a verbal agreement is usually still enforceable, the terms of that agreement may come under scrutiny if there’s a dispute about the services you promised to provide.
To protect yourself and your client, I would recommend that you always have a written contract in place for any training provision you are engaged to provide. At the very least, follow up any verbal agreement to carry out work with an email outlining what you have just discussed, what you will deliver, and when, as well as anything the client has agreed to do as part of your arrangement.
Having a written agreement in place will give both parties something to refer back to and help ensure that you’re both on the same page about who’s doing what, and when, and that you each have realistic expectations.
When creating a written contract, you might want to consider including your payment schedule, the scope of the work, deadlines, and who will own the training materials and trainee data at the end of the training.
Employee vs. contractor
Even if you’re self-employed, there can be situations where it isn’t clear cut whether you’re an employee or a contractor. If, for example, you only have one client, you attend their premises on a full-time basis, or they have the final say on when, where and how you work – as well as what you work on – you might be considered an employee in the eyes of the law.
The Small Business forum defines an independent contractor as someone who ‘operates under a business name, has his/her own employees and maintains a separate business account; advertises his/her business’ services; invoices for work done; has more than one client; has own tools and sets own hours; keeps business records’.
An employee, on the other hand, is defined as someone who ‘performs duties dictated or controlled by others; is given training for work to be done; works only for one employer’.
You can, therefore, clarify your role by having more than one client, setting your own hours where possible, and actively marketing your training business.
As a freelance trainer, it is advisable that you have Professional Indemnity Insurance; you may also want to consider Public Liability Insurance.
Professional Indemnity Insurance helps you stay protected and meet legal costs should one of your clients raise a claim or pursue compensation related to work that you have done for them.
Public Liability Insurance covers the cost of claims made by members of the public for incidents that occur in connection with your business activities, including personal injuries, loss of or damage to property.
Most freelance trainers opt for Professional Indemnity Insurance.
If you have been a member of a professional body but your membership was paid for by an employer in the past, you may need to take out and pay for a new membership that reflects your self-employed status. Membership renewal isn’t always automatic for professional bodies, so you should bear this in mind and keep your memberships current.
Data use/data protection
Data use and data protection are both issues that you will need to consider as a freelance trainer. For example, if you collect data on behalf of a client – perhaps through a feedback survey about your latest training – do you have permission to use that data for your own records? Or what happens if you bring in an associate – do you have anything in place to stop them contacting your clients and competing against you for contracts? You might think it will never happen, but it is important to identify what data use is permitted for all parties in writing.
In terms of data protection, if you plan to keep any individual’s personal information on your systems, such as a client’s name, address or other details, then you may need to obtain a licence from the Information Commissioner’s Office. To check whether this is the case, you can use the IPC’s handy self-assessment tool.
Intellectual property/copyright of training materials
As a freelance trainer, one issue you may face is sourcing training materials. Problems can occur if you use training materials provided by or created for one client in similar training sessions for another client, or if you use training materials created by another trainer.
It’s important to be aware that if you run a training business and charge for your time while using training materials that you don’t own, you could quickly hit legal problems. You should only ever use training materials that you have either created for your own use with multiple clients or for use with one specific client. If you have created the materials, then you know they are your intellectual property to use as you wish.
You can transfer the intellectual property for specific materials over to a client, but I would recommend putting in writing when and how this will happen.
If you decide to use materials produced by someone else, check whether you have their permission to use them or if the person sharing the materials has permission to do so from the original creator or the person who holds the copyright for the material.
The first time you go on a new website, you may notice a short script about the use of ‘Cookies’. Cookies are tiny little files that are stored on your computer – they typically contain the address of the website you’re visiting and codes that your browser sends back to the website each time you visit a page there. They don’t usually contain personal information, although cookies for an e-commerce site might remember more to streamline the buying process for a returning customer.
If you have a WordPress website, there are a number of plugins designed to pop-up a cookies notification and help you stay compliant.