Free Consultancy Agreement Template (UK)

What is this document?

A consultancy agreement is a legally binding contract between a business (the client) and an independent consultant or consultancy firm (the consultant) that sets out the terms on which the consultant will provide professional services. It defines the scope of work, payment terms, intellectual property ownership, confidentiality obligations, and the legal relationship between the parties, making clear that the consultant is an independent contractor and not an employee of the client.

Who needs it?

Any business that engages an external consultant, freelancer, or specialist to provide services on a project or retainer basis, and any consultant or consultancy firm that provides professional services to clients. This template is designed for B2B (business-to-business) arrangements and is suitable for a wide range of consultancy engagements, including management consulting, IT consulting, marketing, design, strategy, finance, HR, and other professional advisory services.

Why is it important?

A properly drafted consultancy agreement is essential for both parties. For the client, it ensures that the scope of work is clearly defined, intellectual property in the work product is assigned to the client, confidential information is protected, and the consultant's status as an independent contractor (not an employee) is established to manage IR35 and off-payroll working risks. For the consultant, it provides certainty about payment terms, protects against scope creep, limits liability, and establishes clear termination provisions. Without a written agreement, both parties are exposed to disputes about what was agreed, who owns the work product, and whether the engagement creates an employment relationship.

Key UK legislation

Supply of Goods and Services Act 1982Late Payment of Commercial Debts (Interest) Act 1998Income Tax (Earnings and Pensions) Act 2003 (IR35 / off-payroll working rules)

Template document

Consultancy Agreement

Date: [Date]

Parties

(1) [Full legal name of Client], a company incorporated and registered in England and Wales with company number [number], whose registered office is at [registered office address] (the "Client"); and

(2) [Full legal name of Consultant], [a company incorporated and registered in England and Wales with company number [number], whose registered office is at [registered office address] / a sole trader whose principal place of business is at [address]] (the "Consultant").

Each referred to individually as a "Party" and collectively as the "Parties".

1. Definitions and Interpretation

1.1 In this Agreement, unless the context otherwise requires, the following definitions apply:

"Business Day" means a day other than a Saturday, Sunday, or public holiday in England when banks in London are open for business.

"Confidential Information" means all information of a confidential nature (whether written, oral, visual, or in electronic form) disclosed by or on behalf of one Party to the other Party under or in connection with this Agreement, including trade secrets, know-how, technical information, business plans, financial information, client lists, and project details, but excluding information that: (a) is or becomes generally available to the public other than through a breach of this Agreement; (b) was already in the receiving Party's possession before disclosure; (c) was independently developed without reference to the disclosing Party's Confidential Information; or (d) was received from a third party who was not bound by any obligation of confidence.

"Deliverables" means all documents, products, work product, reports, designs, materials, and other items produced by the Consultant in the course of performing the Services, as described in the Statement of Work.

"Fees" means the fees payable by the Client to the Consultant for the Services, as set out in clause 5.

"Intellectual Property Rights" means patents, trade marks, service marks, registered designs, utility models, design rights, copyrights, database rights, rights in know-how, trade secrets, and all other intellectual property rights, in each case whether registered or unregistered and including all applications for and renewals or extensions of such rights, and all similar or equivalent rights or forms of protection in any part of the world.

"Services" means the consultancy services to be provided by the Consultant to the Client as described in the Statement of Work.

"Statement of Work" means the description of the Services, Deliverables, timelines, milestones, and any other project-specific details set out in [Schedule 1 to this Agreement / a separate statement of work agreed in writing between the Parties].

1.2 In this Agreement, unless the context otherwise requires:

(a) a reference to a statute or statutory provision includes any subordinate legislation made under it and any modification, consolidation, amendment, extension, or re-enactment of it from time to time;

(b) the words "include", "includes", "including", and "in particular" shall be construed as being by way of illustration or emphasis only and shall not limit the generality of the preceding words;

(d) a reference to a Clause is a reference to a clause of this Agreement.

2. Engagement and Term

2.1 The Client engages the Consultant, and the Consultant agrees to provide the Services to the Client, on the terms and conditions of this Agreement.

2.2 This Agreement shall commence on [start date] and shall continue until [the completion of the Services / a fixed end date / terminated by either Party in accordance with clause 14] (the "Term").

2.3 The Consultant shall perform the Services in accordance with the Statement of Work and any reasonable instructions given by the Client from time to time, provided that such instructions do not materially alter the scope of the Services.

3. Consultant Obligations

3.1 The Consultant shall:

(a) provide the Services with reasonable skill, care, and diligence, in accordance with the standards implied by sections 13 to 15 of the Supply of Goods and Services Act 1982;

(b) perform the Services in accordance with the timelines and milestones set out in the Statement of Work;

(d) allocate sufficient resources, time, and appropriately qualified and experienced personnel to the performance of the Services;

(e) comply with all applicable laws, regulations, and professional standards in the performance of the Services;

(f) keep the Client reasonably informed of the progress of the Services and promptly notify the Client of any circumstances that may affect the Consultant's ability to perform the Services in accordance with the Statement of Work; and

(g) obtain and maintain all necessary licences, permissions, and consents required for the performance of the Services.

3.2 The Consultant shall be free to determine the manner and method by which the Services are performed, subject to complying with the requirements set out in the Statement of Work and this Agreement. The Consultant may engage suitably qualified and experienced sub-contractors or substitutes to perform any of the Services, provided that: (a) the Consultant obtains the Client's prior written consent (such consent not to be unreasonably withheld or delayed); and (b) the Consultant shall remain responsible for the acts and omissions of any sub-contractor or substitute as if they were the acts and omissions of the Consultant.

4. Client Obligations

4.1 The Client shall:

(a) provide the Consultant with all information, materials, access, and co-operation reasonably required for the performance of the Services in a timely manner;

(b) appoint a designated contact person to liaise with the Consultant and to provide instructions and feedback in relation to the Services;

(c) review and provide feedback on Deliverables within [5 / 10] Business Days of receipt, or such other period as the Parties may agree; and

(d) ensure that any information provided to the Consultant is accurate, complete, and not misleading.

4.2 If the Client fails to comply with its obligations under this clause 4 and such failure causes delay to the performance of the Services, the Consultant shall not be liable for any resulting delay, and any affected timelines or milestones shall be extended by a reasonable period.

5. Fees and Expenses

5.1 The Client shall pay the Consultant the Fees for the Services at the rate of [amount] per [hour / day / project milestone / as specified in the Statement of Work], exclusive of value added tax (VAT).

5.2 The Consultant shall submit invoices to the Client [weekly / fortnightly / monthly / upon completion of each milestone], together with reasonable supporting detail of the work performed and time spent.

5.3 The Client shall reimburse the Consultant for all reasonable expenses properly and necessarily incurred by the Consultant in the performance of the Services, provided that: (a) expenses exceeding [amount] individually or [amount] in aggregate per [month / project] require the Client's prior written approval; and (b) the Consultant provides receipts or other reasonable evidence of such expenditure.

5.4 All amounts due under this Agreement are exclusive of VAT, which shall be added to the Consultant's invoices at the prevailing rate where applicable.

6. Payment

6.1 The Client shall pay each valid invoice submitted by the Consultant within [14 / 30] days of receipt.

6.2 If the Client fails to make any payment due under this Agreement by the due date, the Consultant shall be entitled, without limiting its other rights and remedies, to:

(a) charge statutory interest on the overdue amount in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, which accrues on a daily basis from the due date until the date of actual payment, whether before or after judgment, at the rate of 8% per annum above the Bank of England base rate from time to time;

(b) claim the fixed sum compensation provided for under section 5A of the Late Payment of Commercial Debts (Interest) Act 1998; and

(c) suspend the performance of the Services until all outstanding amounts (including accrued interest and compensation) are paid in full, by giving the Client not less than [7] days' written notice of the Consultant's intention to suspend.

6.3 The Client shall pay all amounts due under this Agreement in full without any set-off, counterclaim, deduction, or withholding, except as required by law.

7. Intellectual Property

7.1 All Intellectual Property Rights in the Deliverables shall, upon creation, vest in and be owned by the Client absolutely. To the extent that any Intellectual Property Rights in the Deliverables do not vest in the Client automatically by operation of law, the Consultant hereby assigns (and shall procure that any sub-contractor or substitute assigns) to the Client with full title guarantee all such Intellectual Property Rights, including all rights of action and remedies in relation thereto, for the full term of those rights and all renewals and extensions thereof, throughout the world.

7.2 The Consultant shall, at the Client's request and expense, execute all documents and do all acts and things necessary to give effect to the assignment in clause 7.1, including applying for and supporting the registration of any Intellectual Property Rights.

7.3 The Consultant irrevocably and unconditionally waives all moral rights under the Copyright, Designs and Patents Act 1988 (and all similar rights in other jurisdictions) in the Deliverables to which the Consultant is now or may at any future time be entitled.

7.4 The Consultant retains ownership of all Intellectual Property Rights in any pre-existing materials, tools, frameworks, methodologies, and know-how owned or developed by the Consultant independently of this Agreement (the "Consultant Materials"). Where any Consultant Materials are incorporated into the Deliverables, the Consultant grants to the Client a non-exclusive, royalty-free, perpetual, irrevocable, worldwide licence to use, copy, modify, and distribute such Consultant Materials solely as part of and to the extent necessary for the use of the Deliverables.

8. Confidentiality

8.1 Each Party undertakes that it shall not at any time during the Term, and for a period of [2 / 3 / 5] years after termination or expiry of this Agreement, disclose to any person any Confidential Information of the other Party, except as expressly permitted by this clause 8.

8.2 Each Party may disclose the other Party's Confidential Information:

(a) to its employees, officers, agents, consultants, and professional advisers who need to know such information for the purposes of exercising the Party's rights or carrying out its obligations under this Agreement, provided that the disclosing Party takes all reasonable steps to ensure that such persons comply with the confidentiality obligations set out in this clause 8; and

(b) as may be required by law, a court of competent jurisdiction, or any governmental or regulatory authority.

8.3 Neither Party shall use the other Party's Confidential Information for any purpose other than the performance of its obligations under this Agreement.

8.4 Upon termination or expiry of this Agreement, each Party shall promptly return or destroy (at the other Party's option) all Confidential Information of the other Party in its possession or control, and shall certify in writing that it has done so, except that a Party may retain copies of Confidential Information to the extent required by applicable law or regulation.

9. Data Protection

9.1 Each Party shall comply with all applicable data protection laws and regulations, including the UK General Data Protection Regulation (UK GDPR) and the Data Protection Act 2018, in connection with the performance of its obligations under this Agreement.

9.2 To the extent that the Consultant processes personal data on behalf of the Client in the course of performing the Services, the Client shall be the controller and the Consultant shall be the processor (as those terms are defined in the UK GDPR). The Consultant shall process such personal data only on the Client's documented instructions and in accordance with the requirements of Article 28 of the UK GDPR.

9.3 The Consultant shall implement and maintain appropriate technical and organisational measures to protect personal data against unauthorised or unlawful processing and against accidental loss, destruction, or damage.

9.4 The Consultant shall notify the Client without undue delay after becoming aware of any personal data breach affecting personal data processed on behalf of the Client.

10. Non-Solicitation

[This clause is optional. Delete if not required.]

10.1 During the Term and for a period of [6 / 12] months after termination or expiry of this Agreement, neither Party shall, without the prior written consent of the other Party, directly or indirectly solicit or entice away (or attempt to solicit or entice away) any employee, officer, or contractor of the other Party who has been involved in the provision or receipt of the Services.

10.2 This clause 10 shall not prevent either Party from engaging any person who responds to a general advertisement of employment that is not specifically targeted at employees, officers, or contractors of the other Party.

11. Consultant Status

11.1 The Consultant is and shall at all times remain an independent contractor. Nothing in this Agreement shall be construed as creating a relationship of employment, partnership, joint venture, or agency between the Client and the Consultant (or any of the Consultant's personnel, sub-contractors, or substitutes).

11.2 The Consultant shall not be entitled to any employment rights or benefits from the Client, including but not limited to sick pay, holiday pay, pension contributions, redundancy payments, or any other benefits that an employee of the Client would be entitled to receive.

11.3 The Consultant shall be responsible for and shall indemnify the Client against any income tax, National Insurance contributions, or other taxes, duties, or levies payable in respect of the Consultant's fees and remuneration under this Agreement. If HMRC or any other tax authority determines that the Consultant (or any of the Consultant's personnel) is or was an employee or deemed employee of the Client for tax purposes, or that the off-payroll working rules (Chapter 8 or Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003) apply to the engagement, the Consultant shall indemnify and hold harmless the Client against all resulting tax liabilities, penalties, interest, and costs.

11.4 The Parties acknowledge that the following factors are relevant to the Consultant's status as an independent contractor:

(a) the Consultant has the right to provide a suitably qualified and experienced substitute to perform the Services (subject to clause 3.2);

(b) the Client does not exercise, nor has the right to exercise, control over the manner or method by which the Consultant performs the Services, except to the extent set out in the Statement of Work;

(c) the Consultant is free to provide services to other clients during the Term, provided that this does not materially interfere with the performance of the Services;

(d) the Consultant provides its own equipment, tools, and materials necessary for the performance of the Services (unless otherwise agreed in writing); and

(e) the Consultant bears financial risk in relation to the engagement, including the risk that the Consultant's costs may exceed the Fees payable under this Agreement.

12. Warranties

12.1 The Consultant warrants and represents that:

(a) the Consultant has the right, power, and authority to enter into this Agreement and to perform the Services;

(b) the Services will be performed with reasonable skill and care by appropriately qualified and experienced personnel;

(c) the Deliverables will be original and will not infringe the Intellectual Property Rights or other rights of any third party;

(d) the Consultant has and will maintain all necessary licences, permissions, and consents required for the performance of the Services; and

(e) the Consultant is not subject to any restriction, obligation, or arrangement (whether contractual or otherwise) that would prevent or materially impair the Consultant's ability to perform the Services.

12.2 The Client warrants and represents that it has the right, power, and authority to enter into this Agreement and to provide the information, materials, and access required under clause 4.

12.3 Except as expressly set out in this Agreement, all warranties, conditions, terms, representations, and undertakings, whether express or implied (including by statute, custom, or usage) are, to the fullest extent permitted by applicable law, excluded from this Agreement.

13. Limitation of Liability

13.1 Nothing in this Agreement shall limit or exclude either Party's liability for:

(a) death or personal injury caused by its negligence;

(b) fraud or fraudulent misrepresentation;

(d) any breach of clause 7 (Intellectual Property) or clause 8 (Confidentiality).

13.2 Subject to clause 13.1, the Consultant's total aggregate liability to the Client arising out of or in connection with this Agreement, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, shall not exceed [the total Fees paid and payable by the Client under this Agreement / a specified monetary cap of [amount] / [2] times the total Fees paid in the 12-month period preceding the event giving rise to the claim].

13.3 Subject to clause 13.1, neither Party shall be liable to the other for any:

(a) loss of profits, revenue, business, anticipated savings, or goodwill;

(b) loss of contracts or business opportunity; or

in each case whether or not such loss was foreseeable or the Party had been advised of the possibility of such loss.

14. Termination

14.1 Either Party may terminate this Agreement by giving not less than [14 / 30] days' written notice to the other Party.

14.2 Without prejudice to any other rights or remedies, either Party may terminate this Agreement with immediate effect by giving written notice to the other Party if:

(a) the other Party commits a material breach of any term of this Agreement and (if such breach is remediable) fails to remedy that breach within [14 / 30] days of receiving written notice requiring it to do so;

(b) the other Party takes any step or action in connection with its entering administration, provisional liquidation, or any composition or arrangement with its creditors, having a winding-up petition presented against it, being wound up (whether voluntarily or by order of the court), having a receiver appointed over any of its assets, or being subject to any analogous event or proceeding in any applicable jurisdiction; or

(c) the other Party suspends, threatens to suspend, ceases, or threatens to cease to carry on all or a substantial part of its business.

14.3 The Client may terminate this Agreement with immediate effect by giving written notice to the Consultant if the Consultant is convicted of any criminal offence that, in the reasonable opinion of the Client, may materially affect the Consultant's ability to perform the Services or may bring the Client into disrepute.

15. Effects of Termination

15.1 Upon termination or expiry of this Agreement for any reason:

(a) the Consultant shall immediately deliver to the Client all completed and partially completed Deliverables, together with all materials, documents, and property of the Client in the Consultant's possession or control;

(b) the Client shall pay the Consultant all outstanding Fees for Services properly performed up to the date of termination, together with any approved expenses incurred up to that date;

(c) each Party shall comply with its obligations under clause 8.4 (return or destruction of Confidential Information); and

(d) any provision of this Agreement that is expressly or by necessary implication intended to survive termination shall continue in full force and effect, including clauses 1, 7, 8, 9, 11, 12, 13, 15, and 18.

15.2 Termination or expiry of this Agreement shall not affect any rights, obligations, or liabilities of either Party that have accrued prior to the date of termination or expiry.

16. Insurance

16.1 The Consultant shall maintain in force during the Term, and for a period of [12 / 24] months after termination or expiry of this Agreement, the following insurance policies with a reputable insurer:

(a) professional indemnity insurance with a minimum cover of [amount] per claim; and

(b) public liability insurance with a minimum cover of [amount] per claim.

16.2 The Consultant shall, upon the Client's request, provide evidence that the insurance policies required by this clause 16 are in force, including copies of policy certificates and details of cover.

17. Entire Agreement

17.1 This Agreement (together with the Statement of Work and any other schedules or appendices) constitutes the entire agreement between the Parties in relation to its subject matter and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations, and understandings between them, whether written or oral, relating to that subject matter.

17.2 Each Party acknowledges that in entering into this Agreement it does not rely on, and shall have no remedies in respect of, any statement, representation, assurance, or warranty (whether made innocently or negligently) that is not set out in this Agreement.

18. General Provisions

Variation

18.1 No variation of this Agreement shall be effective unless it is in writing and signed by or on behalf of each Party to this Agreement.

Notices

18.2 Any notice or other communication given under or in connection with this Agreement shall be in writing and shall be delivered by hand, sent by pre-paid first-class post or other next-working-day delivery service, or sent by email, to the Party due to receive it at its registered office address (or principal place of business) or such other address as that Party may notify in writing from time to time. A notice shall be deemed to have been received: (a) if delivered by hand, at the time of delivery; (b) if sent by pre-paid first-class post or other next-working-day delivery service, at 9.00 am on the second Business Day after posting; and (c) if sent by email, at the time of transmission, provided that no delivery failure notification is received by the sender.

Severability

18.3 If any provision of this Agreement (or part of any provision) is or becomes illegal, invalid, or unenforceable, the legality, validity, and enforceability of the remaining provisions of this Agreement shall not be affected. If any provision (or part of any provision) is or becomes illegal, invalid, or unenforceable but would be legal, valid, and enforceable if some part of it were deleted or modified, the provision or part-provision in question shall apply with the minimum modification necessary to make it legal, valid, and enforceable.

No waiver

18.4 No failure or delay by a Party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy.

Assignment

18.5 Neither Party shall assign, transfer, mortgage, charge, sub-contract, delegate, declare a trust over, or deal in any other manner with any of its rights or obligations under this Agreement without the prior written consent of the other Party.

Third party rights

18.6 A person who is not a party to this Agreement shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce any term of this Agreement.

Governing law and jurisdiction

18.7 This Agreement and any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with it or its subject matter or formation shall be governed by and construed in accordance with the law of England and Wales.

18.8 Each Party irrevocably agrees that the courts of England and Wales shall have exclusive jurisdiction to settle any dispute or claim (including non-contractual disputes or claims) arising out of or in connection with this Agreement or its subject matter or formation.

Signed by the duly authorised representatives of the Parties on the date first set out above.

Signed for and on behalf of
[Full legal name of Client]

Signature: ___________________________

Name: [Name of signatory]

Position: [Position / Title]

Date: [Date]

Signed for and on behalf of
[Full legal name of Consultant]

Signature: ___________________________

Name: [Name of signatory]

Position: [Position / Title]

Date: [Date]

This document was created using a template from website-contracts.co.uk.

Clause-by-clause guide

Plain English explanations of the key sections.

Clause 2 establishes the engagement and its duration. You can structure the term as a fixed period, as a project-based engagement ending on completion of the Services, or as an open-ended engagement terminable on notice. The Statement of Work, which can be a schedule to this agreement or a separate document, sets out the specific scope, deliverables, timelines, and milestones. Clause 3 imposes obligations on the Consultant to perform with reasonable skill and care (reflecting the statutory implied term under the Supply of Goods and Services Act 1982), meet agreed timelines, and keep the Client informed. The right of substitution in clause 3.2 is an important indicator of self-employed status for IR35 purposes. Clause 4 places reciprocal obligations on the Client to provide timely access, materials, and feedback, and includes a delay provision if the Client fails to do so.

Clause 5 sets out the fee structure, which can be hourly, daily, project-based, or milestone-based depending on the nature of the engagement. Expenses are reimbursable subject to pre-approval thresholds and evidence of expenditure, which protects the Client against unexpected costs. Clause 6 deals with payment terms and late payment. The Late Payment of Commercial Debts (Interest) Act 1998 gives the Consultant an automatic statutory right to charge interest at 8% above the Bank of England base rate on overdue invoices, plus a fixed sum compensation of between 40 pounds and 100 pounds depending on the size of the debt. This template incorporates these statutory rights directly, ensuring the Consultant can enforce them without ambiguity. The right to suspend Services for non-payment provides additional practical leverage.

Clause 7 assigns all intellectual property in the Deliverables to the Client. Under English law, copyright in works created by an independent contractor belongs to the contractor by default (unlike works created by employees, which generally belong to the employer under section 11(2) of the Copyright, Designs and Patents Act 1988). A written assignment is therefore essential if the Client wants to own the work product. The clause includes a present assignment, a further assurance obligation, and a waiver of moral rights. Importantly, it preserves the Consultant's ownership of pre-existing materials and tools, while granting the Client a broad licence to use any such materials that are incorporated into the Deliverables. Both parties should review the IP clause carefully and ensure it reflects the commercial intention.

Clause 11 is critical for managing the risk of the engagement being treated as one of employment rather than self-employment for tax purposes. Under the off-payroll working rules (commonly known as IR35), if HMRC determines that the Consultant would be an employee 'but for' the existence of the intermediary (typically the Consultant's limited company), the Client may be liable for PAYE income tax and National Insurance contributions on the fees paid. This clause establishes the Consultant's status as an independent contractor and documents the factors that support genuine self-employment: the right of substitution, lack of control over working methods, freedom to work for other clients, provision of own equipment, and financial risk. The tax indemnity in clause 11.3 provides the Client with a contractual remedy if HMRC successfully reclassifies the arrangement. However, the indemnity does not override HMRC's assessment — proper structuring of the working relationship is essential.

Clause 13 limits the Consultant's total liability, typically to the total fees paid or a specified monetary cap. It excludes liability for indirect and consequential losses, subject to carve-outs for death, personal injury, fraud, and breaches of the IP and confidentiality clauses. The limitations must satisfy the reasonableness test under the Unfair Contract Terms Act 1977 to be enforceable. Clause 16 requires the Consultant to maintain professional indemnity insurance and public liability insurance. This is important because it ensures there are funds available to meet any valid claim, particularly where the Consultant is a small business or sole trader with limited assets. The Client should verify that the insurance cover is adequate for the nature and value of the engagement.

Clause 14 provides for termination on notice (giving both parties flexibility to end the relationship), for cause on material breach (with a cure period), and on insolvency events. The Client also has the right to terminate immediately if the Consultant is convicted of a relevant criminal offence. Clause 15 ensures a clean handover: the Consultant must deliver all completed and partially completed Deliverables to the Client, while the Client must pay all outstanding fees for work properly performed up to the date of termination. The survival clause ensures that key provisions — particularly those relating to intellectual property, confidentiality, and liability — continue to bind the parties after the engagement ends.

Frequently asked questions

A consultancy agreement is a contract that governs the relationship between a business client and an independent consultant or consultancy firm. You should use one whenever you engage an external professional to provide services on a project, retainer, or advisory basis — for example, a management consultant, IT specialist, marketing adviser, designer, or any other professional who is not your employee. The agreement sets out the scope of work, fees, payment terms, intellectual property ownership, confidentiality obligations, and the legal status of the relationship. It protects both parties by establishing clear expectations, preventing scope creep, and providing a framework for resolving disputes. It is also important for demonstrating that the engagement is genuinely one of self-employment rather than employment, which is relevant for IR35 purposes.

IR35 refers to the off-payroll working rules set out in Chapters 8 and 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003. These rules are designed to prevent tax avoidance where an individual works through an intermediary (typically a personal service company) but would be an employee of the client if engaged directly. If HMRC determines that the rules apply, the fees are treated as employment income and are subject to PAYE income tax and National Insurance contributions. For medium and large clients, the responsibility for determining the consultant's status and operating PAYE falls on the client under the off-payroll working rules. This template addresses IR35 in clause 11 by documenting the key indicators of genuine self-employment: a right of substitution, client control limited to 'what' not 'how', freedom to work for others, provision of own equipment, and financial risk. The tax indemnity provides contractual protection for the client. However, the written terms alone will not determine the outcome — what matters is the reality of the working relationship.

Under English law, copyright in works created by an independent contractor belongs to the contractor by default. This is unlike the position for employees, where the employer is generally the first owner of copyright in works created in the course of employment under section 11(2) of the Copyright, Designs and Patents Act 1988. This means that without a written assignment, a consultant who creates a report, design, software code, or other work product for a client will own the copyright in that work. This template addresses this by including a comprehensive IP assignment clause in clause 7, which assigns all intellectual property in the Deliverables to the client upon creation. The assignment must be in writing to be effective under section 90 of the CDPA 1988. The template also includes a moral rights waiver and preserves the consultant's ownership of pre-existing materials while granting the client a broad licence to use them as part of the Deliverables.

This template incorporates the statutory rights available to the consultant under the Late Payment of Commercial Debts (Interest) Act 1998. If the client fails to pay an invoice by the due date, the consultant is automatically entitled to charge statutory interest at 8% per annum above the Bank of England base rate, accruing daily from the due date until payment. The consultant is also entitled to fixed sum compensation of 40 pounds (for debts up to 999.99 pounds), 70 pounds (for debts of 1,000 pounds to 9,999.99 pounds), or 100 pounds (for debts of 10,000 pounds or more). Additionally, the template gives the consultant the right to suspend the Services on 7 days' notice if payment remains outstanding. These remedies are cumulative and do not prevent the consultant from pursuing other legal remedies for non-payment.

Yes, subject to conditions. Clause 3.2 permits the Consultant to engage sub-contractors or substitutes to perform any of the Services, provided the Consultant obtains the Client's prior written consent (which cannot be unreasonably withheld) and remains responsible for the sub-contractor's or substitute's work. The right of substitution is an important indicator of self-employed status for IR35 purposes — a genuine, unfettered right to send a substitute is one of the key factors that distinguishes a contract for services from a contract of service (employment). However, the practical reality must match the contractual terms: if the consultant never actually exercises the right of substitution, or if the client would never agree to a substitute, HMRC may argue that the right is not genuine.

The template provides several termination routes. Either party can terminate on notice by giving a specified number of days' written notice (the placeholder is 14 or 30 days). Either party can also terminate immediately for cause if the other party commits a material breach and fails to remedy it within the specified cure period, or if the other party becomes insolvent. The Client has an additional right to terminate immediately if the Consultant is convicted of a relevant criminal offence. Upon termination, the Consultant must deliver all completed and partially completed Deliverables to the Client, and the Client must pay all outstanding fees for work properly performed up to the date of termination. The key provisions on intellectual property, confidentiality, and liability survive termination.