Consultancy Agreement With Company Template for England and Wales

A Consultancy Agreement With Company is a legally binding contract that governs the relationship between an external consultant and a company seeking professional services. This agreement establishes clear terms for the provision of specialized expertise while protecting both parties' interests and ensuring compliance with England and Wales legislation.

When do you need this document?

You need this agreement when hiring external consultants to provide specialized services to your company. This includes engaging management consultants for business strategy, technical specialists for project implementation, or professional advisors for specific expertise. The document is particularly crucial when the consultant will access confidential information, create intellectual property, or work closely with your internal teams. It's also essential for establishing the consultant's independent contractor status to avoid employment law implications and ensure IR35 compliance for tax purposes.

Key legal considerations

The agreement must clearly define the scope of services to avoid disputes over deliverables and expectations. Payment terms should specify rates, invoicing procedures, and VAT obligations under the Value Added Tax Act 1994. Intellectual property clauses are critical—determining whether created works belong to the consultant or client company. Confidentiality provisions protect sensitive business information, while liability limitations help manage risk exposure. The contract should also include robust termination clauses allowing either party to end the relationship with appropriate notice. Importantly, the terms must clearly establish the consultant's independent status to comply with IR35 legislation and avoid unintended employment relationships under the Employment Rights Act 1996.

Legal requirements in England and Wales

Under the Companies Act 2006, the client company must have proper authority to enter into the agreement, typically requiring board resolution or delegated authority. The contract must comply with IR35 off-payroll working rules, demonstrating genuine business-to-business relationship rather than disguised employment. This includes ensuring the consultant has control over how work is performed, can provide substitutes, and bears financial risk. The Supply of Goods and Services Act 1982 implies certain terms about service quality and reasonable skill and care. If the agreement involves third-party beneficiaries, the Contracts (Rights of Third Parties) Act 1999 may apply, requiring careful drafting to exclude or include third-party rights as intended. The agreement should also consider Agency Workers Regulations 2010 if the consultant works through an intermediary, ensuring proper classification and avoiding unintended worker rights.