What should a UK consultant contract include?

A UK consultant or consultancy contract should name the parties, the services and time, day-rate or fixed fee, who owns the reports, IR35 working practices, substitution, a liability cap, and what happens if they cancel or pay late. Sign it before the first workshop. Commissioning advice does not transfer copyright.

This page is England and Wales first. Copyright under the Copyright, Designs and Patents Act 1988 is UK-wide. Off-payroll working (IR35) is a UK tax rule. The money-claim route for an unpaid invoice is the England and Wales procedure in Client won't pay a freelance invoice.

Start from the consulting agreement. How to write a consulting agreement is the shorter how-to. This page is the England and Wales deep-dive: IR35, substitution, UCTA, CDPA ownership of reports, day-rate versus fixed fee, deposit and kill fee. A single project hangs a statement of work under the standing terms. A monthly advice slot sits on a retainer. If the job is mostly making — a site, a brand, a build — use a freelancer agreement instead. Company-to-company contractor terms can start from an independent contractor agreement. If you are sharing unpublished findings before the deal is signed, a mutual NDA sits next to it. Contracts for consultants is the shorter audience page. Contracts for developers and Contracts for freelancers are the delivery siblings.

Nine blocks do the work:

The 40% deposit and 25% kill fee are examples, not a statutory rate. Write the numbers you actually use.

What goes in a freelance or contractor agreement compares templates. How to write a contract is the general checklist. This page is the UK consultant version.

Do not email a Word file and hope v4_final is the one they signed. Both sides should edit and e-sign one shared draft.

A freelance agreement promises a thing: files, a site, a film. A consultancy agreement promises time and judgment. The client stays in charge of whether they take the advice. Write that down, or a later reader will treat your memo as a guaranteed outcome.

Useful splits:

• Output. A report, a workshop, a review, a number of days. Not “the rebrand is finished.”
• Decision. You advise; they decide. You are not their employee and you are not their board.
• Time. Days per month, a fixed project, or a retainer. Spell the unit.
• Success. Paid for the work described, not for their revenue going up.

If the engagement is mostly making, do not force it into a consulting wrapper. A website build or freelancer agreement will describe deliverables and revisions more honestly. How to write a consulting agreement is the shorter version of this split.

In a business-to-business services contract there is an implied term that you will carry out the service with reasonable care and skill — Supply of Goods and Services Act 1982 s.13. You do not need to write that sentence for it to exist. You do need to write what the service is, or “reasonable care” has nothing to attach to.

Example

The Consultant will provide the Services in SchedulescheduleA schedule is an annex to the contract that holds the detail: fees, dates, deliverables, service levels. It is part of the agreement if the main body says so. An order-of-precedence line should say what happens if the schedule and the clauses collide. Swap a schedule only by the variation method the contract names.More in the glossary 1. The Consultant advises; the Client decides whether to adopt any recommendation. The Consultant does not guarantee a commercial, legal or tax outcome. The Services are advice and time, not a finished product.

In Plain English: they buy your judgment and your days. They stay in charge of what they do with it. You are not selling a result.

You do, unless you assign them. CDPA 1988 s.11 makes the author the first owner of copyright in a freelance literary work. A report, a slide deck and written recommendations are literary works. An assignment is not effective unless it is in writing, signed. Paying the invoice does not move title.

The employee exception in s.11(2) applies to employees, not to a consultant on a contract for services. Commissioning the advice does not move copyright. If the contract is silent, a court may find a limited implied licencelicenceA licence is permission to use work in an agreed way, without taking ownership away from the person who made it.More in the glossary for the purpose of the commission. That is not ownership. Silence is how a slide deck becomes their sales training without a further fee.

CDPA 1988 s.90 is the assignment rule. An IP assignmentIP assignmentAn IP assignment is a transfer of ownership in the work, so the client owns it instead of the person who made it.More in the glossary has to be in writing, signed by you or someone signing on your behalf. A licence is permission to use the report. It is not a transfer of ownership. See IP licence vs assignmentIP licence vs assignmentAn IP assignment transfers ownership of copyright or other intellectual property. A licence is permission to use it; the author still owns it. In England and Wales there is no work-made-for-hire first-owner rule for freelancers: Copyright, Designs and Patents Act 1988 s.11. An assignment must be in writing and signed: s.90. Say which you mean, and when it happens.More in the glossary.

Keep three piles:

• New reports and decks — the named deliverables. Licensed or assigned on full payment.
• Working notes — interview scribbles, unused options, discarded routes. Not included unless the paper says so.
• Methods — frameworks, checklists, tools you brought to the job. Licensed for this engagement as pre-existing materials, not assigned.

A US “work for hirework for hireWork for hire is a phrase, common on US-style papers, meaning the client is treated as the author and owner of the work from the start.More in the glossary” heading does not do that work in England and Wales. See work for hire. Write licence or assignment in English words.

If they later want you to implement the advice — to build the site, to run the campaign — that is a new job. Put it on a statement of work or a freelancer agreement, not in a vague “and any related services” line.

Example

Copyright in the reports and decks remains with the Consultant. On receipt of full payment the Client is granted a licence to use the Deliverables internally for the purpose of the engagement. Until then the Client has no licence to copy, publish, communicate or adapt them. Assignment of copyright is not included unless Schedule 1 says so. Pre-existing materials, frameworks and unused options stay with the Consultant and are licensed only as part of the Deliverables.

In Plain English: they may use the named report inside the business once they have paid. They do not own your method. A buyout is extra.

Write that in the intellectual property assignment clause.

A day-rate pays for time. A fixed fee and a retainerretainerA retainer is an arrangement where a client pays a regular fee to secure a set amount of time or ongoing access to a supplier.More in the glossary pay for a named package. Write what a day means, unused-days, expenses that need approval, and a right to pause if an invoice is overdue. Do not leave “help the business grow” as the service.

Name the work in verbs the client will recognise, then cap the time. “Advise on pricing for the new product, one day a week in November” is a service. “Help the business grow” is not.

Money terms that actually get used:

• a day rate or a monthly fee, and what a “day” means
• a deposit or monthly prepayment if the diary is reserved
• invoice dates, and a due date such as net 14 or net 30
• expenses that need written approval first
• a right to pause if an invoice is overdue

A retainer is the right paper for a standing monthly slot. Extra days are change control, not a courtesy. See Client keeps adding extra work.

Example

The Consultant will provide the Services in Schedule 1, up to the days set out there, at the day rate in Schedule 1. A day is 7.5 hours. Invoices are due within 14 days of the invoice date. Reasonable travel booked with the Client’s written approval is billed at cost. The Consultant may pause the Services if an invoice is unpaid 7 days after it is due. Unused days do not roll into the next month unless Schedule 1 says so.

In Plain English: you sell named days at a named rate, they pay in two weeks, travel needs a yes first, and work can stop if they are a week late. Leftover days die unless you wrote a roll-over.

There is no default UK right to keep a deposit or charge a kill fee. Both sides have to agree the sums. Write a deposit before the diary is reserved, a kill fee if they cancel, a short due date, and that no licence bites until payment in full. For a UK business client, statutory interest on late commercial payment is 8% above Bank of England base rate, plus a fixed recovery sum. We do not print the current base rate.

A deposit of 30–50% on signature, with work paused until it lands, is the usual freelance shape. A reserved week of diary is the same idea as a reserved shoot date. A kill fee sits next to it: work done plus a named share of the remaining fee if they cancel for convenience. See cancellation and kill fee.

For a business client, an agreed cancellation charge that is really a sum on breach must not be a penalty. Cavendish Square Holding v Makdessi [2015] UKSC 67 asks whether a secondary obligation imposes a detriment out of all proportion to a legitimate interest in performance. Tie the figure to time held, costs committed and other work turned down. A flat 100% from the day they sign, with no link to those interests, is the shape that looks like punishment.

The longer split is Client cancelled: can you keep the deposit?.

Payment terms should name when invoices go out, how many days to pay — net 14 or net 30Net 30Net 30 means the client has 30 days from the invoice date to pay.More in the glossary — a pause right if an undisputed invoice is overdue, and that any licence or assignment passes only on full payment.

For a qualifying business-to-business debt, the Late Payment of Commercial Debts (Interest) Act 1998 sets statutory interest. GOV.UK on late commercial payments states the rate as 8% plus the Bank of England base rate. Once that interest runs, a fixed recovery sum is also due: £40 under £1,000, £70 from £1,000 to under £10,000, and £100 at £10,000 or more, plus any reasonable recovery costs not met by that sum. See late payment interest. The 1998 Act does not apply to a consumer client. Do not invent a contract rate that has no link to the statute or to the paper.

If the contract says variations must be in writing and signed, a Slack yes does not rewrite the days. Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24 gives effect to that clause.

Example

The Client will pay a Deposit of 40% of the Fee on signature. The Consultant will not start until the Deposit is received. The balance is due on delivery of the reports. Each undisputed invoice is due within 14 days of its date. The Consultant may pause work while any undisputed invoice is more than 7 days overdue. If the Client cancels for convenience after work has started, the Client shall pay for work done to date and a cancellation fee of 25% of the remaining Fee. The Deposit is credited to that sum. Copyright and any licence to use the Deliverables pass to the Client only on payment in full.

In Plain English: 40% lands before you start. They have two weeks to pay. After a week late, work stops. If they call it off, they pay for what is done plus a quarter of what is left. They do not own unpaid reports.

Those percentages are examples, not a statutory rate. The chase sequence is Client won't pay a freelance invoice.

No label decides the tax. From 6 April 2021, public authorities and medium or large clients must give a status determination statement. Small private-sector clients leave that decision with your company. Write autonomy, genuine substitution and mutuality so they match how you actually work. HMRC looks at the contract and the working practices together.

The off-payroll working rules sit in ITEPA 2003. From 6 April 2021, where services are provided through an intermediary to a public authority or a medium or large client with a UK connection, the client must give a status determination statement. That statement must say whether the worker would be an employee if engaged directly, explain the reasons, and be reached with reasonable care.

Where services are provided through an intermediary to a person who is not a public authority and who qualifies as small for the tax year, Chapter 8 applies. A company qualifies as small for a tax year if the small companies regime in the Companies Act 2006 applies to its last financial year that is relevant to that tax year. The worker’s company then decides status.

What the contract can still do is describe the working relationship accurately:

• Autonomy. You decide how to deliver the agreed advice. The client sets the topics, deadlines and reasonable site rules, not day-to-day methods.
• Genuine substitution. You may send a suitably qualified substitute, paid by you. An unlimited client veto makes the right look unreal.
• Mutuality. Each statement of work is a separate engagement. Neither side is obliged to offer or accept further work when an engagement ends.

A paper labelled “consultancy agreement” does not decide the tax. A substitution clause the client would never allow in practice will not carry the status. If they need you on-site at set hours with no substitute, say so and expect an inside determination. If they need an outcome and you can send a substitute, write that, and then actually be able to send one.

See sole trader vs limited companysole trader vs limited companyA sole trader contracts in a personal name and is personally liable. A limited company is a separate legal person; the company is on the hook, not the director, unless there is a guarantee. Switching from one to the other is a novation, not a letterhead change. IR35 / off-payroll rules can still apply to a personal service company.More in the glossary. An exclusivity clauseexclusivity clauseAn exclusivity clause stops one side working with other people in a named market, for a named time. In England and Wales a lock-out has to be for a fixed period: Walford v Miles [1992] 2 AC 128 is why an agreement to negotiate exclusively with no end date fails.More in the glossary that stops you taking other clients feeds control and part-and-parcel. Freedom to take other clients is the outside-friendly version, subject to confidentialityconfidentialityConfidentiality is a promise to keep shared information private and to use it only for the agreed purpose.More in the glossary.

The longer checklist — Chapter 8 and Chapter 10, the status determination statement, and outside-friendly wording — is IR35 contract clauses checklist. This page does not invent wording beyond that.

Example

The Consultant decides how to deliver the agreed advice. The Client may set the topics, deadlines and reasonable access rules, not day-to-day methods. The Consultant may send a suitably qualified substitute, paid by the Consultant. Each statement of work is a separate engagement. Neither side is obliged to offer or accept further work when an engagement ends.

In Plain English: you run the how. They buy the what. You can send someone else who can do the job. This SOW is this SOW — not a promise of next month.

Write a genuine right to send a suitably qualified substitute, paid by you, and that you decide how to deliver the agreed advice. An unlimited client veto, or a right that could never be used, will not help IR35. HMRC looks at whether the right is real, not only whether it is written.

Put substitution in the assignment and subcontracting clause of the consulting agreement or independent contractor agreement, not in a side email.

HMRC’s line is that it is the right that matters, not whether you have used it. An unlimited client veto can make the right look unreal. If the way you work changes, the client has to look at status again.

Example

The Consultant may provide a suitably qualified substitute to perform the services. The Consultant remains responsible for the substitute’s work and pays the substitute. The Client may reject a proposed substitute only on reasonable grounds of lack of skill, security clearance or conflict, and must give those grounds in writing. This is not an unlimited veto.

In Plain English: you can send someone else who can do the job, you pay them, and the client can only say no for a real reason they put in writing.

Agree the wording on one shared draft so the status determination statement and the contract describe the same engagement. The longer table is on IR35 contract clauses checklist.

Cap liability at a multiple of the fees. In England and Wales you cannot exclude liability for death or personal injury caused by negligence. You advise; they decide. Do not guarantee their revenue, a legal outcome or a ranking. See the longer liability guide.

A working limitation of liability names:

• the cap — often the fees paid under the engagement, or a named multiple
• what stays unlimited — death or personal injury caused by negligence cannot be excluded or restricted (Unfair Contract Terms Act 1977 s.2). Other negligence liability can be limited only so far as the term is reasonable
• whether an indemnity sits inside the cap or punches through it
• that you do not warrant a commercial result

The longer page is How a freelancer caps liability.

In a business services contract there is an implied termimplied termsImplied terms are obligations the law reads into a contract even when the parties did not write them down. In England and Wales they come from statute — for business services, reasonable care and skill under the Supply of Goods and Services Act 1982 s.13 — or from common law where a term is necessary for business efficacy.More in the glossary that you will carry out the service with reasonable care and skill — Supply of Goods and Services Act 1982 s.13. A cap sits next to that term. It does not delete it. It also does not make you the warrantor of their product, their tax position or their revenue.

A working pair:

If they want a matching indemnity for a third-party claim that the report is not original, cap it and keep it next to the originality warrantywarrantyA warranty is a promise that something is true, such as “this work is original” or “we have the right to grant this licence.”More in the glossary. Do not warrant worldwide regulatory compliance on a small consultancy fee.

Example

The Consultant’s total liability under this agreement is limited to the fees paid under the relevant statement of work. Nothing in this agreement limits liability for death or personal injury caused by negligence. The Consultant advises; the Client decides whether to adopt any recommendation. The Consultant does not warrant a commercial, legal or tax outcome.

In Plain English: if it goes wrong, you are on the hook up to the fees for that job. You cannot contract out of killing someone by carelessness. They stay in charge of what they do with the memo.

On Contracts.io both sides draft, negotiate and e-signe-signatureAn e-signature is any electronic way of showing agreement to a document, such as a typed name, a drawn signature or a click.More in the glossary one shared consulting agreement, so the days, the rate and the ownership of reports are the version you both signed. Describe the engagement in a sentence. Lex, our AI host, drafts. You share one link. Nobody emails v4_final.docx back and forth.

The client opens that link. They can Accept, Counter or Decline on the same version, then both of you e-sign it. The other side never pays and does not need an account.

Start from the consulting agreement. A single project hangs a statement of work under those standing terms. A monthly slot sits on a retainer. You can also start from the AI contract generator or the contract generator. If you are sharing unpublished findings before the deal is signed, the NDA generator or a mutual NDA sits next to it.

That does not issue an IR35 status determination for the client. It does mean the services, the licence or IP assignment, the deposit, the kill fee and the liability cap are the words you both signed, not a line lost in email.

Free £0, then paid plans from £15 a month — see /pricing.

Try it on contracts.io: describe the advice you sell in one sentence, share one link, and e-sign before the first workshop.

Contracts for consultants is the wider set of terms that sit around this paper. How to write a consulting agreement is the shorter how-to. IR35 contract clauses checklist is the status page. Should I start work before the contract is signed? is the day-one rule. Features is the product tour.