Guide to Rights and Responsibilities for Freelancers

Research by Statista suggests that self-employment is continuing to increase in popularity; as of March 2024, there were more than 4.25 million self-employed people working in the UK, and IPSE estimate approximately 49% of these were freelancers.

In the wake of the COVID-19 pandemic, self-employment has fallen to levels not seen since the middle of 2015, although it continues on an upward trend. As more people move toward this way of working it is more important than ever that the rights and responsibilities of freelancers are understood.

Your rights as a freelancer

• You are legally protected by the terms of your contract with your client.
• You are entitled to be paid for work you’ve done.
• You have a right to a safe working environment. 
• You are protected against discrimination in the workplace.

Note that as you are your own boss you are not covered by employment law, nor do you usually have a right to things like sick pay or legal protection under your clients' company schemes.

Your responsibilities as a freelancer

As a freelancer, you are responsible for running your business and for its success or failure. This means that you are usually wholly responsible for the job you’ve been hired to do and that any liability is your responsibility. You’ll need to insure your business to protect yourself against worst-case scenarios.

Insurance you need as a freelancer

Freelancers typically need the following insurance coverage:

Professional liability insurance

Professional liability insurance is the most common type of insurance for freelancers, and is suitable for anyone from consultants to physiotherapists. Compensation claims have no legal cap in the UK so a single mistake could prove to be expensive. With professional liability insurance you'll be covered against claims of negligence, libel or slander, and the costs of any legal counsel you may need.

Public liability insurance

Public liability insurance is an important type of insurance for those whose work puts them in public contact. Although public liability insurance isn't a legal requirement for freelancers it could protect you should a member of the public sue your freelancing business. It will help cover injury claims and property damage, and is highly recommended if your work ever poses a potential risk to your clients or the public.

Employers liability insurance

As your freelancing business expands you may take on employees. If this happens it is legal requirement in the UK that you have employers liability insurance. This covers you against claims made by your employees should they injure themselves whilst working for you or become ill as a results of their work.

Other trade insurance you may need

As a freelancer your work can put you at a greater risk of an insurance claim and you may require further coverage, such as:

• Home business insurance - If you work from home your house insurance may not cover your business. This speciality insurance will protect your building and equipment against theft and damage.
• Professional consultants insurance– Consultants are at the greatest risk of civil liability claims, which means you need professional indemnity and coverage against things like libel and slander.
• Construction insurance – This insurance covers freelance contractors in the construction industry against public and product liability, among other common risks.
• Trade specific insurance for your occupation.

The impact of AI on freelancers

In recent years, artificial intelligence (AI) has become more popular and widely used in many areas associated with freelancing such as content creation. A survey by Freelancermap found that approximately 60% of freelancers use AI at some point during their work in order to support them, ranging from daily to occasionally.

AI-powered tools can automate repetitive tasks, which can free up time for freelancers to take on more creative tasks. It can also help to ensure 24/7 service availability and let freelancers deliver the same performance and consistency throughout the day. However, there is a growing concern among freelancers that this is resulting in further commodification of freelance work, and could put certain freelancers out of a job as their work becomes automated.

A further survey by Freelancermap of 1283 freelancers worldwide between January and February 2023 shows that ChatGPT (a natural language-trained artificial intelligence model) is already being extensively used by freelancers since it became available for public testing in November last year. According to those surveyed, 55% don’t think AI will replace freelancers, and one third believe that the sectors of development, data and tech will benefit the most from using AI.

Refrens meanwhile found that freelancers in the areas of copywriting, translation, virtual assistance, modelling, research assistance and logo design (amongst others) were the most concerned about the impact of AI on their jobs. This contrasted with marketing consultants, content creators (influencers), interior designers and software developers, who stated that they believe AI will help to make them more productive.

Things to remember as a freelancer

There can be a lot to remember as a freelancers so we've put together a handy checklist of things to keep in mind:

• Register as a sole trader with HMRC.
• Track your sales and expenses.
• Complete an annual self assessment tax return.
• Pay income tax on your profits.
• Register for VAT if you earn more than £83,000 in a given year.
• Register for the construction Industry Scheme if you’re a freelancer in the construction industry.

To ensure you are protected as a freelancer, read more about our freelancer insurance or call us on 0344 346 0409.

Freelancer insurance from Towergate

We can provide bespoke freelance worker insurance policies. It includes cover for professional indemnity insurance, public liability and cyber security.

About the author

Alison Wild BCom (Hons), MAAT, ATT, Taxation Technician is a highly respected industry professional who has been working with and advising SMEs in areas including tax, pensions, insurance and marketing for over 25 years. She is a member of the Association of Accounting Technicians (AAT) and Association of Tax Technicians (AAT) and also has considerable experience as a residential landlord.