United Kingdom Consultancy Agreement
Also known as: Independent Contractor Agreement · Contract for Services · Freelance Agreement
Generate a consultancy agreement tailored to United Kingdom law. Our AI incorporates United Kingdom-specific statutory requirements, disclosure obligations, and legal standards into every clause.
Consultancy Agreement
Also called: Independent Contractor Agreement, Contract for Services
Legal Requirements
United Kingdom Legal Requirements
Key United Kingdom statutes and obligations that apply to your consultancy agreement.
IR35 off-payroll working rules determine whether contractors are genuinely self-employed for tax purposes
From April 2021, medium/large private sector clients are responsible for determining IR35 status
Status Determination Statement (SDS) must be provided by the client to the contractor and the fee-payer
Contractors working through a Personal Service Company (PSC) must assess each engagement separately
VAT registration required if taxable turnover exceeds £90,000 (2024 threshold)
Agreement should clearly define: deliverables, control, right of substitution, and equipment provision
Restrictions & Key Considerations
If IR35 applies, the contractor's company must deduct PAYE income tax and National Insurance on fees
False self-employment (disguised employment) carries back-tax liability plus penalties and interest
Contractors do not have statutory employment rights (sick pay, holiday pay, unfair dismissal protection)
HMRC's CEST tool can be used to assess IR35 status, though its conclusions are not legally binding
FAQ
United Kingdom Consultancy Agreement FAQ
Common questions about the consultancy agreement under United Kingdom law.
What is IR35 and does it affect my contractor agreement?
IR35 is UK tax legislation that determines whether a contractor working through an intermediary (like a limited company) should be taxed as an employee. If the working arrangement resembles employment, PAYE tax and National Insurance apply. Your agreement should clearly reflect genuine contractor characteristics.
What makes a UK contractor genuinely self-employed?
Key factors include: the right of substitution (can send a substitute), no mutuality of obligation (no requirement to offer or accept ongoing work), control (client does not control how work is done), financial risk, and provision of own equipment.
Who is responsible for IR35 compliance?
For engagements with medium and large private sector clients (since April 2021) and all public sector clients (since 2017), the client determines IR35 status. Small private sector clients place the responsibility on the contractor's own company.
Does a UK contractor need to register for VAT?
Contractors must register for VAT if their taxable turnover in the past 12 months exceeds £90,000 (2024 threshold). Many contractors register voluntarily to reclaim VAT on expenses. If registered, VAT must be charged on invoices to clients.
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