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Consultancy Agreement (UK)

Consultancy Agreement

This Consultancy Agreement (the “Agreement”) is entered into on [Effective Date] (the “Effective Date”) by and between:

[Client Name], [Who Client], with its registered or principal address at [Client Address], [Client City], [Client County], [Client Postcode], England (hereinafter referred to as the “Client”); and

[Consultant Name], [Who Consultant], with its registered or principal address at [Consultant Address], [Consultant City], [Consultant County], [Consultant Postcode], England (hereinafter referred to as the “Consultant”).

The Client and the Consultant are referred to collectively in this Agreement as the “Parties” and individually as a “Party”.

BACKGROUND

WHEREAS, the Client wishes to engage the Consultant to provide certain consultancy services as described in this Agreement; and

WHEREAS, the Consultant has represented that it possesses the necessary qualifications, skills, and experience to perform such services; and

WHEREAS, the Parties wish to set out in writing the terms and conditions upon which the Consultant shall provide the Services to the Client;

NOW, THEREFORE, in consideration of the mutual promises and undertakings set out herein, and for other good and valuable consideration, the receipt and adequacy of which the Parties hereby acknowledge, the Parties agree as follows:

1. ENGAGEMENT AND SERVICES

1.1 The Client hereby engages the Consultant, and the Consultant hereby accepts the engagement, to provide the following consultancy services (the “Services”):

[Description of Services]

1.2 The Consultant shall perform the Services with reasonable skill, care, and diligence, and to such standard as would reasonably be expected of a competent professional consultant experienced in the provision of similar services. This obligation is consistent with the implied term under Section 13 of the Supply of Goods and Services Act 1982.

1.3 The Consultant shall comply with all reasonable instructions and directions given by the Client in relation to the Services, provided that such instructions are consistent with the Consultant’s status as an independent contractor and do not amount to supervision, direction, or control of the manner in which the Services are performed.

1.4 The Consultant shall provide the Services at such times and locations as are reasonably agreed between the Parties, and shall not be required to perform the Services at any particular premises of the Client unless expressly agreed in writing.

2. FEES AND PAYMENT

2.1 In consideration of the Services, the Client shall pay the Consultant [Fee Type] of £[Fee Amount] (the “Fees”), exclusive of VAT.

2.2 The Consultant shall submit invoices to the Client in respect of the Fees, and the Client shall pay each invoice [Payment Terms].

2.3 All payments shall be made in pounds sterling (£) by bank transfer to an account nominated in writing by the Consultant.

2.4 If the Client fails to pay any sum due under this Agreement by the due date, the Consultant shall be entitled to charge interest on the overdue amount at the rate of 8% per annum above the Bank of England base rate, in accordance with the Late Payment of Commercial Debts (Interest) Act 1998, accruing daily from the due date until payment is received in full.

3. TERM AND TERMINATION

3.1 This Agreement shall commence on the Effective Date and shall continue for [Agreement Term] (the “Term”), unless terminated earlier in accordance with this clause 5.

3.2 Either Party may terminate this Agreement at any time by giving the other Party not less than [Notice Period] written notice.

3.3 Either Party may terminate this Agreement immediately by giving written notice to the other Party if:

  • the other Party commits a material breach of this Agreement and, where such breach is capable of remedy, fails to remedy it within 14 days of receiving written notice specifying the breach and requiring it to be remedied;
  • the other Party becomes insolvent, enters administration, goes into liquidation (other than for the purposes of a bona fide reconstruction or amalgamation), has a receiver or administrative receiver appointed over all or any of its assets, enters into an arrangement or composition with its creditors, or suffers any analogous event under the Insolvency Act 1986; or
  • the other Party ceases or threatens to cease to carry on business.

3.4 Upon termination of this Agreement for any reason:

  • the Consultant shall immediately cease performing the Services and deliver to the Client all work in progress, Deliverables (whether complete or incomplete), and all Client materials in the Consultant’s possession;
  • the Client shall pay the Consultant for all Services performed and expenses properly incurred up to the date of termination, in accordance with clauses 3 and 4; and
  • any clauses of this Agreement which expressly or by implication are intended to survive termination (including clauses 6, 7, 8, 10, 11, 12, 13, and 14) shall continue in full force and effect.

4. INTELLECTUAL PROPERTY

4.1 All intellectual property rights (including copyright, database rights, design rights, patents, and trade marks) in any materials, reports, documents, software, or other work product created by the Consultant in the performance of the Services (the “Work Product”) shall, upon creation, vest in and be the absolute property of [Ip Ownership].

4.2 Where the Work Product vests in the Client, the Consultant hereby assigns (and, to the extent that any such rights arise in the future, agrees to assign) all intellectual property rights in the Work Product to the Client with full title guarantee. The Consultant shall execute all documents and do all things necessary to give effect to this assignment, at the Client’s expense.

4.3 Where the Work Product vests in the Consultant, the Consultant hereby grants to the Client a non-exclusive, royalty-free, perpetual, irrevocable, worldwide licence to use, copy, modify, and distribute the Work Product for the Client’s internal business purposes.

4.4 The Consultant warrants that the Work Product will be original and will not infringe the intellectual property rights of any third party.

4.5 Nothing in this Agreement shall transfer to the Client any intellectual property rights in any pre-existing materials, tools, methodologies, or know-how owned by the Consultant prior to the Effective Date (the “Consultant’s Background IP”). The Consultant grants the Client a non-exclusive, royalty-free licence to use the Consultant’s Background IP solely to the extent incorporated in the Work Product.

5. CONFIDENTIALITY

5.1 Each Party undertakes that it shall not, during or after the Term, disclose to any person any Confidential Information of the other Party, except as permitted by clause 7.2.

5.2 Each Party may disclose the other Party’s Confidential Information:

  • to its directors, employees, contractors, or professional advisers (including solicitors and accountants) who have a genuine need to know such information for the purposes of this Agreement, provided that such persons are bound by obligations of confidentiality no less restrictive than those contained herein;
  • as may be required by law, by any court of competent jurisdiction, or by any regulatory or governmental authority, subject to giving the other Party as much prior written notice as is reasonably practicable.

5.3 “Confidential Information” means all information of a confidential or proprietary nature (whether or not recorded in documentary form) disclosed by one Party to the other, including but not limited to: trade secrets, business plans, financial information, customer and supplier lists, pricing strategies, technical data, source code, algorithms, know-how, and any information designated as confidential.

5.4 The obligations set out in this clause 7 shall not apply to information that: (a) is or becomes publicly available other than through any act or omission of the receiving Party; (b) was lawfully in the receiving Party’s possession before disclosure; (c) is lawfully disclosed by a third party without restriction; or (d) is independently developed without reference to the disclosing Party’s Confidential Information.

5.5 The obligations of confidentiality under this clause 7 shall continue for [Confidentiality Period] following the termination or expiry of this Agreement.

6. LIMITATION OF LIABILITY

6.1 Nothing in this Agreement shall limit or exclude the liability of either Party for:

  • death or personal injury caused by its negligence;
  • fraud or fraudulent misrepresentation; or
  • any other liability which cannot be limited or excluded by applicable law.

6.2 Subject to clause 13.1, neither Party shall be liable to the other Party for any indirect, consequential, special, or exemplary loss or damage arising out of or in connection with this Agreement, including but not limited to loss of profit, loss of revenue, loss of business, loss of anticipated savings, loss of goodwill, or loss of data, whether arising in contract, tort (including negligence), breach of statutory duty, or otherwise.

7. INDEMNITY

7.1 The Consultant shall indemnify and keep indemnified the Client against all losses, damages, costs, claims, and expenses (including reasonable legal fees) arising out of or in connection with:

  • any breach by the Consultant of any of its obligations under this Agreement;
  • any claim that the Work Product infringes the intellectual property rights of any third party;
  • any act or omission of any substitute appointed under clause 10; and
  • any negligent or wilful act or omission of the Consultant in the performance of the Services.

7.2 The Client shall indemnify and keep indemnified the Consultant against all losses, damages, costs, claims, and expenses (including reasonable legal fees) arising out of or in connection with any breach by the Client of any of its obligations under this Agreement.

8. FORCE MAJEURE

8.1 Neither Party shall be liable for any failure or delay in performing its obligations under this Agreement to the extent that such failure or delay is caused by a Force Majeure Event, provided that the affected Party gives prompt written notice to the other Party and uses all reasonable endeavours to mitigate the effects of the Force Majeure Event.

8.2 “Force Majeure Event” means any event beyond a Party’s reasonable control, including but not limited to: acts of God, flood, earthquake, storm, epidemic or pandemic, fire, explosion, war, terrorism, strike, lock-out, governmental action, or failure of public utilities or transport.

8.3 If a Force Majeure Event continues for a period of more than 60 consecutive days, either Party may terminate this Agreement by giving 14 days’ written notice to the other Party.

9. NOTICES

9.1 Any notice or other communication required or permitted under this Agreement shall be in writing and shall be delivered by hand or sent by first-class post to the registered or principal address of the relevant Party as set out in this Agreement.

9.2 Notices sent by first-class post shall be deemed received on the second business day after posting.

10. NO WAIVER

10.1 A failure or delay by either Party to exercise any right or remedy provided under this Agreement or by law shall not 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.

11. SEVERABILITY

11.1 If any provision of this Agreement is held by any court or other competent authority to be invalid, void, or unenforceable in whole or in part, the other provisions of this Agreement and the remainder of the affected provision shall continue in full force and effect.

12. ASSIGNMENT

12.1 The Consultant shall not assign, transfer, charge, sub-contract, or otherwise deal with all or any of its rights or obligations under this Agreement without the prior written consent of the Client.

12.2 The Client may assign or transfer its rights under this Agreement to any successor in title to all or substantially all of its business, provided that it gives written notice to the Consultant.

13. ENTIRE AGREEMENT

13.1 This Agreement constitutes the entire agreement between the Parties relating to the subject matter hereof and supersedes all prior oral and written agreements, representations, and undertakings between the Parties relating to the same subject matter.

13.2 Each Party acknowledges that it has not relied on any statement, representation, assurance, or warranty of any person (whether a party to this Agreement or not) that is not set out in this Agreement.

14. THIRD PARTY RIGHTS

14.1 A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms.

15. AMENDMENTS

15.1 No amendment or variation of this Agreement shall be effective unless made in writing and duly signed by an authorised representative of each Party.

16. GOVERNING LAW AND JURISDICTION

16.1 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 laws of England and Wales.

16.2 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.

IN WITNESS WHEREOF, the Parties have executed this Consultancy Agreement as of the Effective Date first written above.

THE CLIENT

Full name: [Client Name]

Address: [Client Address], [Client City], [Client County], [Client Postcode], England

THE CONSULTANT

Full name: [Consultant Name]

Address: [Consultant Address], [Consultant City], [Consultant County], [Consultant Postcode], England

Client

________________

Signature

Date: ________________

Consultant

________________

Signature

Date: ________________

Maintained by Vladislav Sergienko, Founder·Template last modified: ·Report an error

What Is a Consultancy Agreement (UK)?

A Consultancy Agreement in the United Kingdom sets the services to be provided, the fees, the timetable, and each side's responsibilities for the engagement, and takes its legal force from the Supply of Goods and Services Act 1982.

Under English common law, a consultancy agreement is a contract for services (as distinct from a contract of service, which creates an employment relationship). The Supply of Goods and Services Act 1982 implies a term into contracts for services that the supplier will carry out the services with reasonable care and skill (Section 13). This statutory implied term operates alongside any express terms in the agreement and provides the client with a baseline standard of performance.

A critical consideration in any UK consultancy engagement is the IR35 off-payroll working legislation, contained in Chapter 10 of Part 2 of the Income Tax (Earnings and Pensions) Act 2003. IR35 is designed to prevent tax avoidance by individuals who supply their services through an intermediary (such as a personal service company) but who would be classified as employees if engaged directly. Since April 2021, medium and large private-sector clients have been responsible for determining whether an engagement falls inside or outside IR35. The determination depends on three key tests: control (whether the client directs how the work is done), substitution (whether the consultant can send a replacement), and mutuality of obligation (whether the client must offer work and the consultant must accept it). A properly drafted consultancy agreement should address all three tests.

Where the consultant will access or process personal data during the engagement, the agreement must comply with the Data Protection Act 2018, which incorporates the UK General Data Protection Regulation (UK GDPR) into domestic law. If the consultant acts as a data processor on behalf of the client, Article 28 of the UK GDPR requires specific contractual provisions covering processing instructions, security measures, sub-processor restrictions, breach notification, and data deletion upon termination.

The legal framework governing the Consultancy Agreement (UK) in United Kingdom draws on several key statutes and regulatory bodies. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Parties executing a Consultancy Agreement (UK) in United Kingdom should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Companies Act 2006 sets the foundational requirements.

When Do You Need a Consultancy Agreement (UK)?

A consultancy agreement should be used whenever a business engages an external consultant, freelancer, or advisory firm to provide professional services on a non-employment basis. The most common situations in England and Wales include:

Engaging a management consultant, strategy adviser, IT consultant, marketing specialist, financial adviser, HR consultant, or other professional to provide expert advice or deliverables for a defined project or retainer period. Unlike employment contracts, consultancy agreements do not create employment rights under the Employment Rights Act 1996, meaning the consultant is not entitled to unfair dismissal protection, statutory redundancy pay, or statutory sick pay.

Where a company needs specialist expertise for a time-limited project — such as a digital transformation programme, regulatory compliance review, or market entry strategy — without creating a permanent headcount or offering employment benefits. The consultancy agreement defines the project scope, deliverables, timeline, and fees.

When a personal service company (PSC) or limited company consultant provides services to a client and both parties wish to document that the engagement falls outside IR35. A written agreement that accurately reflects the working relationship is essential evidence if HMRC challenges the IR35 status of the engagement.

Where intellectual property will be created during the engagement and the parties need to establish clearly who owns the resulting IP. Under the Copyright, Designs and Patents Act 1988, the default position for non-employees is that the creator retains copyright — a consultancy agreement can vary this by including an express assignment clause.

When confidential business information, trade secrets, customer data, or personal data will be shared with the consultant, requiring contractual protections that go beyond the common law duty of confidence.

Parties in United Kingdom should prepare a Consultancy Agreement (UK) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

What to Include in Your Consultancy Agreement (UK)

A well-drafted UK Consultancy Agreement for England and Wales should contain the following key provisions:

Scope of Services — A precise description of the consultancy services to be provided, including any specific deliverables, milestones, and acceptance criteria. Ambiguity in the scope is the most common source of disputes in consultancy engagements.

Fees and Payment — The fee structure (fixed fee, hourly rate, daily rate, or retainer), payment terms, currency (GBP), VAT treatment, and late payment provisions. The Late Payment of Commercial Debts (Interest) Act 1998 gives the consultant a statutory right to charge interest on overdue invoices at 8% above the Bank of England base rate.

IR35 Status Clause — Provisions addressing the consultant’s self-employment status, including express statements on control, substitution, and mutuality of obligation. While the contractual terms alone do not determine IR35 status (HMRC and tribunals will also examine the actual working practices), a well-drafted clause demonstrates the parties’ intention and provides evidence of the agreed relationship.

Intellectual Property — Clear allocation of IP rights in the work product. If IP is to vest in the client, the agreement should include a present assignment of future rights and a warranty of originality.

Confidentiality — Mutual obligations to protect confidential information disclosed during the engagement, with standard exclusions for publicly available information and legally compelled disclosures.

Data Protection — Compliance with the Data Protection Act 2018 (UK GDPR), including data processing obligations where the consultant handles personal data on the client’s behalf.

Termination — Notice periods, grounds for immediate termination (material breach, insolvency), and post-termination obligations including delivery of work in progress and payment for services rendered.

Limitation of Liability — Exclusions of indirect and consequential losses and an overall cap on the consultant’s aggregate liability. English law requires that exclusions of liability for death, personal injury caused by negligence, and fraud cannot be excluded (Unfair Contract Terms Act 1977).

Third Party Rights Exclusion — An express exclusion of the Contracts (Rights of Third Parties) Act 1999 to prevent unintended third-party claims.

Governing Law — A clause confirming that the agreement is governed by the laws of England and Wales, with exclusive jurisdiction in the courts of England and Wales.

Additional compliance elements for a Consultancy Agreement (UK) used in United Kingdom include: Under the Companies Act 2006, Companies House maintains the register of UK companies. Section 386 of the Companies Act 2006 sets accounting record obligations. The Competition and Markets Authority (CMA) enforces the Consumer Rights Act 2015. The Financial Conduct Authority (FCA) regulates financial services under the Financial Services and Markets Act 2000. The High Court of Justice has jurisdiction under the Senior Courts Act 1981. Forms-legal.com provides this template as a starting point for United Kingdom-compliant documentation.

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@misc{formslegal-consultancy-agreement-uk,
  author       = {{Forms Legal}},
  title        = {Consultancy Agreement (UK) (United Kingdom)},
  year         = {2026},
  howpublished = {\url{https://forms-legal.com/uk/business/contracts/consultancy-agreement-uk}},
  note         = {Free legal document template. Based on Companies Act 2006}
}

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Frequently Asked Questions

Based on Companies Act 2006 — Template last modified June 2026Verify the source →

This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer

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