Eryn Peters, who helped create the AI Maturity Index and thinks a lot about how work will change, has an interesting idea. She suggests that companies hire freelancers through platforms using ongoing payment plans, where they can easily switch out team members and even create small, flexible “micro teams”. We analyse the pros and cons of such a concept and whether HMRC would even allow them.
Her concept of freelancing combines long-term collaborations, offering clients consistent support and access to evolving expertise while providing freelancers with stable income and scaling opportunities. However, the UK’s worker status policies around “disguised employment”, IR35, and Off-payroll rules present significant hurdles to this seemingly innovative approach.
In a Q&A in the 2025 Outvise Freelancer Study Understanding Business Tech Freelancers, Peters suggests a model where a client pays a flat rate for a team of, say, five freelancers, but the specific individuals within that team can change over time as project needs evolve. This flexibility is attractive, allowing clients to access a broader range of skills without the administrative burden of constantly onboarding new individuals. For freelancers, a retainer model offers predictable income, a welcome departure from the feast-or-famine cycle of project-based work. The concept of microteaming, where freelancers build their own expert teams, further enhances scalability and allows for more comprehensive service offerings.
Where it could work (potentially)
Genuine substitution: If the platform and contractual agreements genuinely allow for the client to have no say in who the freelancer sends as a substitute, and the freelancer has a clear right to provide a suitably skilled replacement, this could potentially fall outside the scope of disguised employment. The absence of a personal service requirement is a key indicator of self-employment under UK law. The platform would need to facilitate this substitution seamlessly, ensuring the client’s needs are met without direct control over individual workers.
Freelancer control over microteams: If freelancers have genuine autonomy in forming their microteams, choosing their collaborators, and managing their work, this reinforces their status as independent businesses operating collaboratively. The platform’s role would be to facilitate these connections and provide a framework for collaboration, without dictating the team structure or management.
Focus on outcomes, not individuals: If the retainer is structured around deliverables and outcomes rather than the specific individuals providing the services, it could mitigate concerns about disguised employment. The emphasis shifts from the client “employing” five individuals to purchasing a service delivered by a flexible team.
Platform as a true intermediary: If the platform acts as a genuine intermediary, managing contracts, payments, and providing a clear separation between the client and the individual freelancers, it could help navigate the Off-payroll rules. For medium and large-sized clients, the responsibility for determining IR35 status lies with them. A robust platform could provide tools and frameworks to aid in these assessments, focusing on the nature of the engagement rather than treating all freelancers within a “swappable” team as employees.
Where it couldn’t work (challenges)
Disguised employment risks: The “swappable” team model could easily fall into the trap of disguised employment if, in practice, the client exerts control over the selection or performance management of the individual freelancers. If the client effectively has a consistent team (even if the names change occasionally) and directs their work in a manner akin to an employer-employee relationship, HMRC is likely to view this as disguised employment. Factors such as the right of substitution, mutuality of obligation (an expectation of continued work), and control over how, when, and where the work is done are crucial.
IR35 implications: For freelancers operating through Personal Service Companies (PSCs), the IR35 rules are paramount. If a freelancer within a “swappable” team is deemed to be operating as a disguised employee (i.e., their working conditions would be those of an employee if they were directly engaged), then the income received via their PSC would be subject to employment taxes (Income Tax and National Insurance Contributions). The retainer model itself doesn’t automatically trigger IR35, but the nature of the engagement – the level of control, the obligation to provide personal service, and the mutuality of obligation – will be key determinants. Even with the “swappable” element, if the role and responsibilities remain consistent, IR35 could still apply.
Off-payroll working rules: For medium and large-sized clients engaging freelancers through intermediaries (including platforms), the Off-payroll working rules (introduced in 2017 for the public sector and extended to the private sector in 2021) place the responsibility for determining the freelancer’s IR35 status on the client. If the client determines that a freelancer within the “swappable” team is inside IR35, the client (or the fee-payer in the supply chain) is responsible for deducting Income Tax and National Insurance Contributions at source. The “swappable” nature might complicate the status determination process, as each individual freelancer’s circumstances and the specifics of their role within the team would need to be considered. A blanket “inside” or “outside” determination for the entire “swappable” team might be inappropriate and legally risky.
Mutuality of obligation in retainers: Retainer agreements inherently suggest a degree of mutuality of obligation. While a genuine commercial contract for services exists between the client and the platform (or the freelancer’s microteam), if the individual freelancers within the “swappable” team feel obligated to accept work and the client feels obligated to provide it, this strengthens the argument for an employment relationship, potentially triggering IR35. The platform would need to carefully structure these retainers to emphasise project-based tasks within a longer-term framework, rather than an ongoing expectation of work for specific individuals. Bringing in new talent to the team based on individual freelancer availability and not obligation might also work.
Defining “swappable” and maintaining consistency: While flexibility is the aim, maintaining consistency for the client is also crucial. If the “swapping” of team members leads to significant variations in service quality or requires substantial client input for each new team member, the model’s value proposition diminishes. The platform would need robust vetting and onboarding processes for freelancers to ensure consistent quality across the “swappable” pool.
What would platforms have to do?
For Peters’ vision to work within the UK’s regulatory framework, platforms would need to:
Facilitate genuine substitution: Implement mechanisms that empower freelancers to substitute themselves without client veto, based on skills and availability.
Emphasise project-based deliverables: Structure retainers around specific projects, milestones, and outcomes, rather than a fixed number of individuals working continuously.
Support freelancer autonomy: Enable freelancers to genuinely build and manage their own microteams with minimal client interference.
Provide IR35 guidance (without giving advice): Offer resources and frameworks to help clients assess the IR35 status of individual freelancers within the “swappable” teams, emphasising the need for individual assessments based on working practices.
Ensure clear contractual terms: Draft contracts that clearly define the relationship as a contract for services, emphasising the absence of employment rights and obligations between the client and individual freelancers.
Focus on the platform as an intermediary: Position the platform as the primary contracting entity, managing payments and providing a buffer between the client and the freelancers.
Points to ponder
Eryn Peters’ concept of “swappable” freelancer teams and microteaming holds promise for creating more flexible and long-term engagements. However, seeing her vision come to fruition in the UK’s existing employment tax regulations requires careful consideration of disguised employment risks, IR35 implications, and the nuances of the Off-payroll working rules.
If online workplaces want to use these new ideas, they need to really make sure:
- Freelancers can genuinely send someone else to do the work if needed.
- Freelancers have real control over how they work.
- The main focus is on getting the job done well.
- They also need to give clients good help to understand the tricky IR35 tax rules.
If they don’t think about these things, this new idea could get stymied by the very rules it’s trying to move past. The trick is to find a good middle ground: being flexible but also following the rules.
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