If you’ve spent any time in clinic-owner groups lately, you’ll have seen the same debate popping up again and again:
“Is it illegal to take on a physio or therapist as self-employed if they work for you regularly?”
It’s a fair question — and the level of confusion online is understandable. Employment status in the UK isn’t defined by what you call someone. It’s defined by the reality of the working relationship.
Healthcare and veterinary clinics often sit in a grey zone: you want flexibility, your associates want independence, but you also need consistency, quality control and patient continuity. And that’s exactly where the law gets sensitive.
Let’s unpack this properly — with nuance, clarity and a practical lens for clinic owners.
The Heart of the Issue: What Defines Employment?
HMRC doesn’t care if your contract says “self-employed,” “associate,” “contractor,” or “freelancer.”
They look at how the relationship actually works day-to-day.
Three big questions decide status:
1. Control
Who decides the diary, the pricing, the clinical protocols, the hours worked?
If the clinic dictates these, that leans heavily towards employment.
2. Mutuality of Obligation (MOO)
Is the clinic obligated to offer ongoing work?
Is the therapist obligated to accept it?
If yes → that’s employment territory.
3. Substitution
Can the therapist send someone else in their place?
In true self-employment, they can.
In most clinics… they absolutely cannot. And that’s a red flag.
In other words, if someone works in your clinic, following your rules, at your schedule, with your clients — they are very likely an employee in the eyes of HMRC, regardless of what you’ve labelled them.
This is what’s referred to as a “disguised employee.”
Why So Many Clinics Still Use “Self-Employed” Associates
Because historically, the sector has relied on it.
And because it can be done — legally — but only if the relationship is structured correctly.
Here’s how clinics justify (or attempt to justify) it:
- They argue the therapist controls their own hours.
- They pay per-treatment, not a salary.
- They allow the therapist to work elsewhere.
- They say “They’re responsible for their own tax and insurance.”
- They use an associate agreement they found online.
The problem?
Most of these alone don’t make someone self-employed.
It’s the whole relationship that matters.
And many clinics unintentionally mix models — e.g., “You’re self-employed, but I need you here Tuesdays and Thursdays, you’ll follow our pricing, we’ll book your diary, and you can’t send anyone else.”
That’s where risk creeps in.
So… Is It Illegal?
Let’s make this absolutely clear:
Hiring someone on a self-employed basis is not illegal.
Hiring someone as “self-employed” when the relationship is actually one of employment can breach tax law.
Clinics don’t get prosecuted for this out of the blue — but they can face:
- Back-dated PAYE and employer NIC
- Penalties
- Interest
- In some cases: repayment of holiday pay or pension contributions
- Claims for unfair dismissal if things go sour
It’s not that clinics are being unethical — most are simply unaware of the rules, or copying what everyone else seems to be doing.
What About the Question: “How are employers getting around this?”
Many aren’t “getting around it.”
They’re either:
- Using poor templates and hoping for the best, or
- Structuring a genuine self-employment model, or
- Moving towards employment because it’s safer long-term.
A genuine self-employed associate model can work, but only if the clinic is comfortable with:
- The associate setting their own hours
- The associate having control of their diary
- The associate deciding their pricing (or at least negotiating it)
- The associate being able to send a substitute
- The clinic having less control over how work is delivered
- Variation in quality and continuity
- A more fluid relationship overall
If that feels uncomfortable — you’re probably describing an employee, not a contractor.
“Clients only want me — not someone I hire.”
A very real concern.
This is one of the biggest psychological barriers clinic owners face when growing from “me” → “we.”
Here’s the truth:
Clients come for you when:
- You’re the only clinician
- Your brand revolves around your personal identity
- You haven’t yet built a replicable methodology or team-based service model
But clients will happily see someone else when:
- You position the clinic (not just yourself) as the provider
- You define shared standards, protocols and treatment approaches
- You introduce the associate properly, with endorsement
- You transition clients intentionally rather than abruptly
- You build trust in your system, not just you as a person
Growth requires you shifting from
“I am the product” → “My clinic delivers the product.”
That shift often determines whether employment or self-employment makes more sense.
So What Should a Clinic Owner Actually Do?
Here’s a practical framework to help you decide:
Option 1: True Self-Employment (rare, but possible)
Works if the associate:
✓ Controls their diary
✓ Manages their own clients
✓ Sets or negotiates pricing
✓ Can work anywhere
✓ Isn’t managed day-to-day
✓ Can send a substitute
✓ Takes financial risk
You essentially become a host — providing space, systems and brand, not direction.
Option 2: Employment (the safer choice for consistent clinic delivery)
Best for clinics that want:
✓ Standardised protocols
✓ Predictable hours
✓ Stable rotas
✓ Control over patient experience
✓ Ownership of the diary
✓ Long-term clinical capability
✓ Easy team integration
This gives you control — and gives associates security.
Option 3: Hybrid Structures (used, but must be airtight)
For example:
- Employed hours for core work
- Self-employed for optional add-on services
This is complex and requires bespoke legal and tax advice.
A Final Thought: Lead With Intention, Not Assumptions
The worst thing a clinic owner can do is copy what the clinic down the road is doing.
Employment status isn’t a preference or a vibe — it’s a legal reality shaped by:
- control
- obligation
- substitution
- integration into the business
- level of independence
- financial risk
If you want the associate to behave like part of your team — embrace employment.
If you want hands-off flexibility — build a legitimate self-employment model.
Both are valid.
Neither is inherently better.
But one will fit your strategy far more than the other.
If you’d like help reviewing your associate model, assessing your risk level, or designing a structure that supports growth and compliance, I’m here to support you.
