Consultancy Agreements Solicitors

Our Commercial Law team have substantial experience preparing, negotiating and drafting consultancy agreements on behalf of individuals and businesses across Gloucestershire and beyond.

We provide legal support and advice across a wide range of industries with a strong ability to tailor and adapt our advice to suit each client’s individual needs and commercial goals.

Consultancy offers a range of benefits to both consultant and client. Consultants are (ideally) not employees legally or for the purposes of tax, so can be an efficient and flexible way to work or utilise the services of an expert. However, there are many technical and practical considerations to take into account to avoid disputes or legal issues arising.

From the way the consultancy relationship is managed to determining the consultant’s status for tax, the consultancy agreement forms the foundation you need to protect yourself and your commercial interests.

Contact our consultancy agreement solicitors in Gloucestershire

For expert advice about consultancy and entering into a consultancy agreement, please contact your local office in Gloucester or Stroud today. If you have a quick question or would like to request a call back, you can also use our online enquiry form and a member of our team will be in touch shortly.

Our consultancy agreements solicitors’ expertise

At WSP Solicitors, we believe in making the law plain and simple. We will listen carefully to you and clearly set out your options so you can make an informed decision about how to move forwards. We can advise you on all legal matters relating to consultancy agreements, including:

• General advice about the legal considerations and implications of providing services as a consultant or utilising the expertise of consultants.
• Drafting, preparing and reviewing consultancy agreements.
• Advice about working or hiring via a personal service company or other intermediary.
• IR35 advice and employment status determinations.
• Consultancy dispute resolution, including handling Employment Tribunal proceedings.

We will ensure that any consultancy agreement we draft for you is legally compliant and fully reflects your commercial requirements.

We are also on hand to help you resolve any disputes that may arise in the course of the consultancy, and often work closely with our Commercial Disputes team to find strategic and cost effective solutions.

What is a consultant?

A consultant is an individual, usually a professional with expertise in a particular niche or specialised industry, who provides services to a business. Consultancy is very common within particular industries, such as the IT industry where skills are in demand and the work can be lucrative.

There is not really a distinct legal status for the term ‘consultant’. Legally, consultants are not employees so do not have the same legal protections as someone working for a business under a contract of employment.

‘Genuine’ consultants are also considered self-employed for the purposes of tax and are responsible for dealing with HMRC themselves to pay income tax and national insurance contributions (NICs) and any other tax that may fall due, such as capital gains tax.

However, consultants are not automatically considered to be self-employed. A set of rules called IR35 or the off-payroll rules are in place to assess whether a consultant or contractor is self-employed for the purposes of tax or whether they are a ‘deemed employee’. From April 2021, it is the business’s responsibility to determine their consultants’ working tax status (unless the business is small).

Whether a consultant is a ‘deemed employee’ will often come down to a number of unique considerations, including the construction and interpretation of the consultancy agreement in place. So, it is vital that the consultancy agreement is carefully drafted to ensure compliance.

What is a consultancy agreement?

A consultancy agreement is the legal contract that defines the parameters of a self-employed consultant’s work and other essential terms, such as pricing for the project or period of consultancy, payment terms, termination, intellectual property, and mechanisms for dispute resolution.

When do you need a consultancy agreement?

Ideally, you should have a consultancy agreement in place for any services provided by a consultant on a self-employed basis. This includes if the consultant is appointed via their own personal services company, an intermediary company, and agent or another intermediary.

Why do you need a consultancy agreement?

It may be tempting to work without a contract to save time and money, but this is not advisable.

Your consultancy agreement is vital for many reasons, including:

• The agreement regulates the relationship between consultant and end client. It will clearly set out each party’s rights and obligations so there can be no confusion over details such as payment deadlines. Should a dispute arise, either party can point to the contract to resolve it, saving time and costs for all. The contract will also usually include dispute resolution clauses, guiding the response to any dispute and reducing disruption to each party’s business.
• The agreement can help define and distinguish your legal rights, for example, by making setting out your rights in relation to any intellectual property created as part of the consultancy or providing penalties for late payment.
• The agreement plays a major part in distinguishing your tax position, i.e. it could mean the difference between whether you fall inside or outside IR35, potentially saving you thousands in tax and an investigation by HMRC.

What should a consultancy agreement include?

The exact terms of your consultancy agreement will depend on your individual needs and the nature of the services provided, but common terms include:

• The nature and scope of services to be provided by the consultant.
• Terms regarding the consultant’s right of substitution (i.e. to use someone else to complete the work).
• Payment terms and details of penalties for late payment.
• Insurance and liability clauses.
• Intellectual property clauses.
• Data protection.
• Termination of the consultancy agreement.
• Dispute resolution mechanisms.

Contact our consultancy agreement lawyers in Gloucestershire

For expert advice about consultancy and entering into a consultancy agreement, please contact your local office in Gloucester or Stroud today. If you have a quick question or would like to request a call back, you can also use our online enquiry form and a member of our team will be in touch shortly.