Consultancy agreement for a retainer arrangement

A retainer is a promise of availability in return for a regular fee, and it fails when neither side can say what the fee buys: the client expects unlimited help, the consultant expects to be paid for not being needed, and unused hours pile up or vanish by assumption. The agreement has to define the time or scope included, the priority the client gets, what sits outside, and the fee mechanics, and it has to be drafted so that a standing obligation to provide and pay for work does not turn an independent consultant into something else. The fixed fee for drafting it, for the client or for the consultant, is £595, with delivery in five working days. HMRC's Check Employment Status for Tax tool is used to check status engagement by engagement; no document can guarantee the outcome.

Who this is for

Businesses in England and Wales retaining a consultant, adviser or specialist on a monthly fee for ongoing support, and consultants who sell retainers and want an agreement that defines them.

What matters in a retainer agreement

What a retainer buys

The agreement should say whether the retainer buys a block of time (a number of hours or days a month), a defined scope of ongoing services (monthly reporting, a weekly call, availability for questions), or priority access at a day rate, because each is a different bargain; a retainer for 'ongoing support as required' is a dispute waiting for the first busy month, and the definition is the clause that prevents it.

The time included and the rollover question

Where the retainer buys time, the agreement should state the hours or days, how they are recorded and reported, what happens to unused time (lost at month end, rolled over for a stated period, or credited against a later invoice), and the rate for time beyond the allocation with the client's approval before it is used; unused time that rolls over indefinitely becomes a liability the consultant cannot resource, and time that is lost without a report becomes a grievance the client cannot quantify.

Availability, priority and response

The agreement should state the consultant's availability (working days, hours, response time to requests), the priority the retained client receives over project clients, the arrangements for holidays and absence (notice, a substitute where appropriate), and the method of instruction, so that the retainer is a service with a service level rather than a right to the consultant's attention at any moment.

What falls outside the retainer

The agreement should list the work the retainer does not cover (projects, work requiring specialist input, travel, work for the client's group companies, urgent out-of-hours work) and provide for it to be quoted and agreed separately at stated rates, with the consultant able to decline it; the client's expectation that everything is included is the commonest cause of retainer breakdowns, and a list is the answer.

The mutuality problem a retainer creates for status

An arrangement in which the client must pay a monthly fee and the consultant must make themselves available each month resembles the mutuality of obligation that characterises employment, and the agreement should reflect the features that make the retainer a business arrangement: the consultant's other clients, control over how and when the work within the allocation is done, the right to substitute, their own premises and equipment, and a fee for availability and services rather than a salary. Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003, the off-payroll regime, places the status decision with a medium or large client of a company-based consultant, and that decision rests on HMRC's tool and the facts.

Fees, increases, notice and the end of the retainer

The agreement should state the monthly fee, payment in advance by a stated date with interest under the Late Payment of Commercial Debts (Interest) Act 1998, annual increases by index or on notice, a minimum term if agreed, termination on notice by either party to end the retainer with no refund of the current month, a handover of work in progress, and the position on intellectual property, which should be assigned to the client on payment under section 90 of the Copyright, Designs and Patents Act 1988 with the consultant's own materials retained; liability should be capped at the fees paid in a stated period with consequential loss excluded, tested under section 11 of the Unfair Contract Terms Act 1977.

What it costs

Consultancy or contractor agreement, £595. Drafted for your business. Five working days.

Template set for repeat use, £895. One master agreement plus a short-form schedule you can reuse for every engagement. Five working days.

Buying online forms the engagement on payment. The scope is what the consultancy and contractor agreements page describes, you accept the Terms of Service at checkout, and I email you within four working hours to get started. If you would rather ask something first, email me.

What you get

• A clear, express assignment of intellectual property to your business
• Confidentiality provisions that protect your business information
• Restrictive covenants drafted at a scope a court will uphold
• Clear treatment of status, so the arrangement is not accidentally something else
• Payment, deliverables and termination provisions that match how you work
• A reusable structure, so the next engagement costs you nothing

What is not included

• Employment status determinations and off-payroll working assessments, which need your accountant
• Tax advice
• Disputes with a contractor you have already engaged
• Immigration and right to work compliance

Questions I am often asked

Our client has not used their retainer hours for three months and wants a refund. Do we owe one?

Not if the agreement says unused time is lost or rolls over for a stated period only. A retainer pays for availability as well as work, and the agreement says so; without a clause, the argument is open.

Can we require the consultant to be available every working day?

You can state availability and response times, but a requirement to be at your disposal all day every day, with set hours, makes the retainer look like employment. The agreement sets availability as a service level with the consultant's other work preserved.

What notice should a retainer have?

A month or two on both sides is usual, with no refund of the current month and a handover of work in progress. A longer minimum term is a commercial choice the agreement can provide for.

Related guidance and services

• Consultancy and contractor agreements, £595, the service this page describes
• Contract review, £495
• Employment contracts and handbooks, £595
• Statement of work for a consultancy engagement
• Consultancy agreement for a fractional CFO

This page is general guidance for businesses in England and Wales, not advice on your own circumstances. Last reviewed: October 2026. Email geoffrey@caesar.co.uk.