How to Use This Checklist

Click each checkbox to mark items as complete. Your progress is automatically saved to your browser. Use this checklist to:

✅ Three Ways to Use This Tool

1. Audit existing agreements: Review your current consultancy agreement against all 47 compliance points
2. Draft new agreements: Ensure you don't miss any essential legal requirements
3. Compare with solicitor drafts: Verify your lawyer has covered everything

⚠️ Understanding Importance Levels

🔴 Critical: Must have - omission creates serious legal risk
🟡 Important: Should have - recommended for proper protection
🔵 Recommended: Best practice - enhances clarity and enforceability

👥

1. Parties and Basic Terms (5 items)

Client's Full Legal Name and Registered Address

Must include exact legal name (as registered at Companies House if limited company) and registered office address. Essential for enforceability.

🔴 Critical

Company Registration Number (if applicable)

For limited companies, include Companies House registration number for absolute clarity on legal entity.

🟡 Important

Consultant's Full Legal Name and Address

Must match consultant's legal trading name. If limited company, use registered company name and address, not personal details.

🔴 Critical

Clear Agreement Date

Date agreement is signed by both parties. Critical for calculating notice periods, term duration, and limitation periods.

🔴 Critical

Specified Commencement Date

Date when services begin. Can be same as agreement date or future date. Important for determining when obligations begin.

🔴 Critical

💼

2. Services and Scope (4 items)

Detailed Description of Services

Specific, clear description of services with deliverables, timelines, and quality standards. Vague descriptions lead to disputes.

🔴 Critical

Work Location Specified

Whether remote, at client premises, consultant office, or hybrid. Important for insurance, health & safety, and IR35 assessment.

🟡 Important

Expected Time Commitment (if applicable)

X days per week or X hours per month. Clarifies expectations and helps demonstrate genuine self-employment for IR35.

🔵 Recommended

Standards and Quality Requirements

Services must be performed with reasonable skill and care, to professional standards, in compliance with laws.

🔴 Critical

🏛️

3. IR35 and Employment Status (8 items)

⚠️ IR35 Critical Warning

If your agreement looks like employment (control, integration, mutuality of obligation), HMRC may demand backdated employment taxes. Your agreement MUST clearly demonstrate genuine self-employment.

Explicit Statement: Consultant is Independent Contractor

Clear statement that consultant is not employee, worker, or agent. Relationship is business-to-business, not employer-employee.

🔴 Critical

Right of Substitution

Consultant can send a substitute (subject to reasonable skill requirements). One of strongest indicators of genuine self-employment.

🔴 Critical

Consultant Responsible for Own Tax and NI

Clear statement consultant handles all tax, National Insurance, VAT liabilities. Client makes no deductions at source.

🔴 Critical

No Employee Benefits

Not entitled to holiday pay, sick pay, pension contributions, or other employment benefits. Demonstrates they're not integrated as employee.

🔴 Critical

Right to Provide Services to Others

Consultant can work for other clients simultaneously (unless reasonable non-compete for direct competitors).

🔴 Critical

Control Over How Services Are Performed

Consultant controls how they deliver work, subject to agreed outcomes. Client doesn't supervise day-to-day. Excessive client control = employment.

🔴 Critical

Consultant Uses Own Equipment

Provides own equipment, tools, software (unless client-specific systems required). Demonstrates business overhead and genuine self-employment.

🟡 Important

Financial Risk

Consultant bears financial risk—could make profit or loss. May include fixing mistakes at own cost, insurance requirements, or pricing risk.

🟡 Important

💷

4. Fees and Payment (6 items)

Clear Fee Structure

Specify whether fixed, monthly retainer, daily/hourly rate, or milestone-based. Include exact amounts. Ambiguity leads to disputes.

🔴 Critical

VAT Treatment Specified

State whether fees are plus VAT, inclusive of VAT, or no VAT applies. If VAT-registered, 20% VAT must be added.

🔴 Critical

Payment Terms (Days After Invoice)

Number of days after invoice (typically 30 days in UK). Clear terms are legally enforceable and allow statutory interest on late payments.

🔴 Critical

Late Payment Interest

Specify interest rate on late payments (typically 8% above Bank of England base rate). Legal right under Late Payment of Commercial Debts Act.

🟡 Important

Right to Suspend for Non-Payment

Consultant can suspend services if undisputed invoices aren't paid. Protects consultant from continuing work without payment.

🔵 Recommended

Expense Reimbursement Policy

Whether expenses are reimbursed, require pre-approval, and any threshold amounts. Include requirement for receipts.

🟡 Important

💡

5. Intellectual Property (5 items)

Clear IP Ownership Terms

Specify who owns IP created during engagement. Typically client owns all new IP, but must be explicitly stated as consultants don't automatically transfer IP.

🔴 Critical

Assignment of Future IP Rights

If client owns IP, include assignment of future rights (by way of present assignment). Transfers IP automatically upon creation.

🔴 Critical

Further Assurance Clause

Consultant agrees to execute all documents necessary to vest IP rights in client. Ensures IP can be properly registered and enforced.

🟡 Important

Pre-Existing IP Treatment

Address consultant's pre-existing tools, methods, IP. Typically consultant retains ownership but grants client license to use.

🟡 Important

Warranty of Originality

Consultant warrants work is original and doesn't infringe third-party IP. Protects client from liability if consultant uses others' copyrighted material.

🟡 Important

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🔒

6. Confidentiality (5 items)

Mutual Confidentiality Obligations

Both parties must keep confidential information secret. Consultant learns about client's business, but client may also see consultant's methods.

🔴 Critical

Definition of Confidential Information

Clear definition: business information, trade secrets, know-how, customer lists, financial data. Without definition, unclear what's protected.

🔴 Critical

Standard Exceptions to Confidentiality

Standard carve-outs: information that's public, already known, independently developed, or legally required to be disclosed.

🟡 Important

Post-Termination Duration

How long confidentiality survives termination (typically 3-5 years for general info, indefinite for trade secrets). Must be reasonable to be enforceable.

🟡 Important

Return of Confidential Materials

Obligation to return or destroy all confidential information on termination. Prevents consultant retaining sensitive client data.

🟡 Important

🛡️

7. Data Protection and GDPR (7 items)

⚠️ GDPR Warning

If consultant processes personal data without proper GDPR provisions, you're both at risk of ICO enforcement action up to £17.5 million. Data processor agreements are legally required under UK GDPR Article 28.

Data Controller/Processor Roles Defined

Specify who is controller and who is processor (if applicable). Usually client is controller, consultant is processor if handling personal data on client's instructions.

🔴 Critical

Processing Only on Documented Instructions

If consultant is processor, they can only process personal data as instructed by client. Can't use for own purposes. Required by UK GDPR Article 28.

🔴 Critical

Appropriate Security Measures

Consultant must implement technical and organizational measures to protect personal data (encryption, access controls, secure deletion). Required by UK GDPR Article 32.

🔴 Critical

Assistance with Data Subject Rights

Consultant must help client respond to data subject access requests, erasure requests, etc. Without this, client can't fulfill GDPR obligations.

🔴 Critical

Data Breach Notification

Consultant must notify client without undue delay of any personal data breach. Client needs to know within 72 hours to report to ICO if required.

🔴 Critical

Deletion or Return at End of Service

Consultant must delete or return all personal data when services end (unless legally required to retain). Prevents unnecessary data retention.

🔴 Critical

Sub-Processor Authorization Requirements

Consultant can't engage sub-processors without client approval. Ensures client knows who has access to their personal data and can assess risks.

🟡 Important

⚖️

8. Liability and Insurance (5 items)

Professional Indemnity Insurance Requirement

Specify if consultant must maintain PI insurance and minimum cover amount (£1-10M typical). Protects both parties if something goes wrong.

🟡 Important

Liability Cap

Maximum amount consultant is liable for (often capped at fees paid or insurance amount). Without cap, consultant faces unlimited exposure.

🔴 Critical

Exceptions to Liability Cap

Carve-outs where liability can't be limited: death/personal injury, fraud, breaches that can't be limited by law. Legally required—you can't cap these.

🔴 Critical

Exclusion of Consequential Loss

Neither party liable for indirect losses (lost profits, business, reputation). Standard and reasonable—only direct losses can be claimed.

🟡 Important

Warranties from Both Parties

Both parties warrant they have authority to enter agreement, consultant warrants work will be skillful and original. Your remedies if something goes wrong.

🟡 Important

📋

9. Termination (5 items)

Agreement Duration Specified

Fixed-term (3, 6, 12 months) or open-ended? Fixed-term ends automatically; open-ended continues until terminated. Clarity prevents disputes.

🔴 Critical

Notice Period for Regular Termination

How much notice either party must give (7, 14, 30+ days typical). For IR35, consultant having right to terminate with notice supports self-employment.

🔴 Critical

Immediate Termination Rights

Circumstances for immediate termination: material breach, insolvency, gross negligence. Protects both parties when relationship has broken down.

🟡 Important

Post-Termination Obligations

What happens on termination: return materials, payment for work completed, survival of confidentiality/IP clauses. Prevents confusion about obligations.

🟡 Important

Payment for Work Completed

Client must pay for all work performed up to termination date. Protects consultant from doing work without payment if contract ends early.

🔴 Critical

🔐

10. Additional Protections (4 items)

Non-Competition Clause (if required)

Whether consultant can work for competitors during/after engagement. Must be reasonable (max 6-12 months post, specific geography/sector) to be enforceable.

🔵 Recommended

Non-Solicitation of Clients

Consultant can't solicit client's customers for period after termination (typically 6-12 months). Protects client relationships but must be reasonable.

🔵 Recommended

Non-Solicitation of Employees

Consultant can't hire client's employees for period after termination. Prevents poaching. Must be reasonable (6-12 months, limited to employees worked with).

🔵 Recommended

Assignment and Subcontracting Terms

Whether consultant can delegate work or assign contract. Usually requires client approval. For IR35, some ability to subcontract supports self-employment.

🟡 Important

📜

11. Legal Formalities (8 items)

Entire Agreement Clause

This agreement supersedes all prior negotiations. Prevents parties claiming "but you said..." based on pre-contract discussions. Legally important for certainty.

🔴 Critical

Governing Law and Jurisdiction

Which country's laws apply (England & Wales, Scotland, Northern Ireland) and which courts have jurisdiction. For UK parties, English law and courts is standard.

🔴 Critical

Notices Provisions

How formal notices must be given (email, recorded delivery, to which addresses). Important for termination notices, breach notifications. Without this, notices may be invalid.

🟡 Important

Severability Clause

If one provision is invalid/unenforceable, rest of agreement survives. Prevents entire contract failing if one clause is problematic.

🟡 Important

Variation Clause

Changes must be in writing and signed by both parties. Prevents informal variations and "he said/she said" disputes about changes.

🟡 Important

Force Majeure

Neither party liable for failures due to circumstances beyond reasonable control (pandemic, natural disaster, war). Standard protection for unforeseen events.

🔵 Recommended

No Third Party Rights

No one except parties can enforce this agreement (Contracts (Rights of Third Parties) Act 1999). Prevents unexpected third parties claiming rights under your contract.

🔵 Recommended

Signatures and Execution

Proper signature blocks for both parties with name, position (for companies), and date. Agreement isn't binding until properly executed by both parties.

🔴 Critical

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Next Steps

Now that you've reviewed the compliance checklist, you have three options:

✅ Use Our Ready-Made Template (Recommended)

Save hours of legal research and drafting. Our professionally-crafted consultancy agreement covers all 47 compliance points with legally-sound wording. Available in both Interview Mode (guided) and Editor Mode (direct editing) for just £10.

📝 Draft Your Own Agreement

Use this checklist as your guide, but remember: getting the legal wording correct is complex. IR35 compliance, GDPR provisions, and IP assignment clauses require precise language. A single error can make your entire agreement unenforceable.

⚖️ Book a Legal Consultation

For complex situations or high-value contracts, consider booking a consultation with our legal professionals for personalized advice tailored to your specific circumstances.

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