Consultancy agreements

Clear legal advice for consultants

At Hutchinson Thomas, we work with consultants to ensure that the agreements governing their relationship with the businesses they work for are clear and unambiguous.

Providing services to a business as an independent contractor rather than as an employee offers advantages to both parties. A business can secure the expertise and skills that it needs but without having to take on an employee, while as a contractor you have the flexibility to take work as and when you choose to.

For tax reasons, it is essential to clearly establish your position as a consultant rather than an employer, and a sound consultancy agreement is the best way to do this. 

Terms of a consultancy agreement

The consultancy agreement will define your status as a consultant and set out the services you will provide, payment details and how the relationship will be terminated.

Your client may wish to include restrictive covenants within the agreement to protect their interests, for instance, requiring confidentiality or preventing you from soliciting their clients, employees or suppliers. It is important that this type of clause is drafted carefully, as it could imply an employer-employee relationship if it exercises too much control over your behaviour.

The agreement should also specify who owns the intellectual property rights in respect of any work created by you in your role as a consultant and on what basis the business may use it.

In some cases, it may be advantageous, for tax reasons, for a consultant to set up a service company. We can advise you in respect of this and assist you in incorporating a company if need be.

HM Revenue & Customs may look closely at the consultant-business relationship to see whether you are a consultant or whether it believes you to be an employee. Difficulties can arise in respect of tax if it decides that you are not a consultant, so it is essential that all aspects of your consultancy are properly delineated.

Contact us

Our employment team has wide experience of dealing with consultants and drawing up robust consultancy agreements offering protection, preserving rights and clearly setting out the tax position. We can work with you to negotiate and approve a consultancy agreement or to draft one tailored to your specific needs and situation.

Hutchinson Thomas is the first law firm in Wales to be awarded the Law Society Mark of Excellence. The firm and many of our lawyers are recognised year on year in the Legal 500 publication as leading individuals in their field.

If you intend working under the terms of a consultancy agreement and you would like legal advice before signing it to ensure that it is the best deal for you, ring us on the following numbers or fill in our contact form.