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If you're a freelancer you're not technically an employee, but you still count as a "worker". Statutory employment rights are gradually being extended to cover these kinds of working practices, so the legal distinction between "employee" and "self-employed" may in future become less important in determining your rights. So what is an employee? Despite a history of court and tribunal judgements, there is no definitive test that can be used to determine whether you count as an employee or are definitely self-employed. This means it's vital to read your contracts carefully and take note of the following issues … <B>Check your contract's terms</b>
Many statutory rights such as unfair dismissal and redundancy pay are not available to freelance workers. So, depending on the provisions in your contract, your employer may be able to terminate your contract with little or no notice. This can leave freelancers facing a sudden shortfall in income and no redress against the other party. To protect your position, a self-employed worker should, where possible, negotiate a longer notice period in the contract so that, if the worst comes to the worst, you'll have more time to find alternative work.
<B>Beware the taxman</b>
The Inland Revenue may seek to recover unpaid tax and National Insurance contributions (plus interest and possibly financial penalties) from individuals who have treated themselves as self-employed for tax purposes but whom the Revenue considers to be employees. This can occur even if the written contract terms state that the individual is self-employed. If you're uncertain about your tax status, ask the Revenue for guidance.
Employers should also be concerned about this happening, as they won't have paid National Insurance contributions on money paid to people they consider self-employed. If the Inland Revenue decides that such workers are actually employees, it can claim those unpaid contributions from the employer. In the worst-case scenario, where the Revenue cannot recover tax and National Insurance from an individual, it may seek to recover these from the employer, as well as the employers' National Insurance.
<B>Making discrimination claims</b>
Discrimination legislation covers not only employees but also self-employed workers who have agreed to do a job personally. So workers may be able to bring discrimination claims based on disability, sex, race, or religious or sexual orientation, even if they are not employees and so are not eligible to claim unfair dismissal.

If you are concerned about any of these aspects of working as a freelancer, you should seek legal advice.