Question 1

What is the difference between a contractor, a consultant and a temp?

Accepted Answer

The terms are used loosely and overlap, but they describe genuinely different relationships — in who you work for, what you are selling, and how you are paid and taxed.

**Temporary worker (temp).** Engaged through an **agency** to fill a gap — cover for absence, seasonal demand, a busy period. The agency pays you; the client pays the agency. You do the existing job as defined by the client, under their direction. Typically paid hourly, with the agency handling payroll and statutory deductions. In the UK, agency workers acquire certain rights to equal treatment after a qualifying period.

**Contractor.** Engaged for a **defined piece of work or fixed period**, usually through your own limited company or an umbrella company, frequently at a day rate. You are selling **capacity and skills** — doing work the organisation would otherwise hire for. Contractors are common in IT, engineering and construction, often embedded in teams for months or years.

**Consultant.** Selling **expertise and judgement** rather than capacity — diagnosing a problem, recommending an approach, or delivering a defined outcome. Usually engaged on a statement of work with deliverables rather than hours. May be independent or part of a consultancy firm. The distinction from contracting is about **what is being bought**: advice versus labour.

**Where it gets muddled:** many people described as consultants are working as contractors, and vice versa. Job titles follow market convention rather than the underlying relationship.

**Why the distinction has consequences:**

**Tax and employment status** hinge on the substance of the working relationship, not the label. Being called a consultant does not make you self-employed for tax purposes.

**Rights differ substantially** — employees, workers and the genuinely self-employed have different entitlements to holiday, sick pay, notice and unfair dismissal protection.

**Rates are not comparable to salaries.** A day rate must cover gaps between engagements, pension, holiday, sickness and accounting.

This is general information, not tax or legal advice.

Question 2

How to negotiate freelance contract terms?

Accepted Answer

Negotiating freelance contract terms is crucial for clarity and mutual understanding. Key points include scope of work, payment terms, and intellectual property rights.

Question 3

What is the difference between an employee, a worker and self-employed?

Accepted Answer

In UK law these are three distinct employment statuses with sharply different rights, and what your contract calls you does not decide it — a tribunal looks at the reality of the arrangement.

Question 4

How to negotiate salary as a freelancer?

Accepted Answer

Negotiating salary as a freelancer involves understanding market rates, knowing your worth, and being prepared to discuss various compensation aspects.

Question 5

How do you set freelance rates?

Accepted Answer

By working backwards from the income you need, not forwards from what you used to earn per hour — because the arithmetic of freelancing is fundamentally different from employment and almost everyone

Question 6

How to understand employment contracts?

Accepted Answer

Understanding employment contracts involves reviewing key elements like job title, compensation, work hours, and termination clauses to ensure clarity and protection.

Question 7

What is the difference between a recruiter, a headhunter and an agency?

Accepted Answer

The critical question with all of them is who pays them, because that determines whose interests they serve — and in almost every case, it is not you. Internal (in-house) recruiter. Employed by the

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