How to draft a freelance instructor agreement

The bottom line

To avoid legal confusion and issues with HMRC, your agreement must clearly state that the instructor is a self-employed contractor and not an employee. The most effective way to do this is to ensure they have the right to provide a substitute, use their own teaching methods, and manage their own tax and insurance.

Why this agreement is essential

In the UK, the line between an employee and a contractor can sometimes be thin. If HMRC or an employment tribunal decides your 'freelancer' is actually an employee, you could be liable for backdated National Insurance, holiday pay, and pension contributions. A well-drafted agreement sets the ground rules for your professional relationship and limits your liability.

Key sections to include

Your agreement should be written in plain English so both parties understand their obligations. At a minimum, include the following sections:

• Status of the instructor: Explicitly state that the instructor is a self-employed contractor. Use phrases like "Contract for Services" rather than "Employment Contract."
• Substitution clause: To support their self-employed status, allow the instructor to provide a qualified substitute if they cannot teach a class, provided the substitute meets your standards.
• Payment terms: Detail how much they will be paid (e.g., a flat fee per class or a per-head rate) and how they should invoice you. State that they are responsible for their own Income Tax and National Insurance.
• Insurance and certifications: Make it a mandatory condition that they maintain their own Professional Indemnity and Public Liability insurance, as well as valid yoga teaching certifications and First Aid certificates.
• Liability and indemnity: Include a clause where the instructor agrees to compensate (indemnify) you if their actions lead to a legal claim against your business.
• Termination: Define how much notice either side needs to give to end the agreement (e.g., 30 days).

Essential self-employment 'tests'

When drafting, remember that a contract is only valid if it reflects the reality of the work. To ensure they stay in the 'freelance' category, consider these points:

Pro Tip: Always ask for a copy of their insurance certificate and teaching qualification before they lead their first session. Keep these on file and check them annually to ensure they haven't expired.

Finalising the document

Once you have drafted the agreement, send it to the instructor for review. Both parties should sign and date two copies, so you each have one for your records. While you can find templates online, it is often worth having a legal professional give it a quick once-over to ensure it complies with current UK employment law.