Consultancy Agreement

A consultancy agreement documents the commercial deal (scope, fees, deliverables, IP and other terms) and signals to the consultant and HMRC that the relationship is one of self-employment rather than disguised employment. The IR35 and employment status risks are significant for both sides.

Why a written consultancy agreement matters on both sides

From the engager's perspective, an agreement that looks like an employment contract in substance (fixed hours, no right of substitution, integrated into the team, no commercial risk on the consultant) is a potential PAYE liability and a potential employment tribunal claim. From the consultant's perspective, a document that does not clearly establish independence is the wrong starting point for arguing self-employment if challenged.

The agreement is part of the picture, not the whole of it, but it needs to point in the right direction. It clarifies the working relationship, defines the scope of services, protects intellectual property, and supports the position that the engagement is one of self-employment rather than employment.

The agreement covers scope of services, fees, payment terms, intellectual property ownership, confidentiality, data protection, and termination, tailored to the specific engagement and designed to be commercially practical while protecting your legal position.

Example: a typical scope and fixed fee

For an engager taking on a consultant or freelancer on a self-employed basis, the typical scope looks like this.

What's included

• A consultation to understand the engagement and working arrangements
• Drafting of a consultancy agreement covering scope of services, fees, payment terms, IP ownership, confidentiality, data protection, and termination
• One round of revisions based on your feedback
• Final version ready to issue

What's outside this scope

• IR35 assessment 
• Employment law advice if the engagement may be one of employment rather than self-employment
• Tax advice

Fixed fee: £450, no VAT.

How I will approach your matter

Once you have instructed me, I will arrange a consultation to understand the engagement and working arrangements. The drafting will reflect the relationship, substitution rights, control, integration, and other status indicators, rather than aspirational language that the working pattern would not support.

Common questions

Why is a written agreement important for a freelancer?

A written agreement clarifies the working relationship, protects your IP, and supports the position that the engagement is one of self-employment rather than employment. Without it, there is a greater risk of disputes and adverse IR35 assessments.