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. Draft new freelance contracts: Ensure you don't miss any essential UK contract law requirements
2. Review existing contracts: Audit your current freelance/contractor agreements against all 36 compliance points
3. Prepare for new clients: Verify your template contract is legally compliant before engaging freelancers or contractors
⚠️ What Makes a Valid Freelance Contract?
📋 Legal Status: Freelance contracts are business-to-business agreements. Clear contract terms prevent IR35 issues and establish true self-employed status. Written contracts are essential evidence for HMRC and tribunals.
⚖️ Key Distinctions: Must demonstrate: right to substitution, no control over working methods, no mutuality of obligation, contractor provides equipment, contractor bears financial risk. Missing these = deemed employment.
🎯 Essential Terms: Parties, service description, fees, payment terms, duration, IP ownership, confidentiality, liability, termination rights, IR35 status determination. Missing terms create legal uncertainty.
💼 Common Issues: IR35 misclassification, unclear IP ownership, missing PI insurance requirements, inadequate confidentiality, no liability cap, missing GDPR compliance, unclear payment terms
⚠️ Understanding Importance Levels
🔴 Critical: Must have - contract law requirement or creates serious legal/tax risk if omitted
🟡 Important: Should have - best practice and strong legal protection
🔵 Recommended: Nice to have - enhances clarity and prevents disputes
Client/Company Name
The client's full legal name or registered company name. Must match Companies House registration for limited companies. Using trading names creates legal ambiguity. This is the party commissioning the services and paying the contractor.
🔴 Critical
Company Registration Number
Companies House registration number if client is a limited company. Optional but recommended for verification and demonstrating client is legitimate business. Helps contractor check client's financial standing and trading history.
🔵 Recommended
Client Address
Client's registered office address or principal business address. Required for serving legal notices, contract enforcement, and tribunal proceedings. Must be accurate and current. Include full postcode.
🔴 Critical
Freelancer/Contractor Name
Contractor's full legal name (individual name or business name if trading as limited company/partnership). Must match ID documents and tax records. If limited company, include company name. Critical for contract validity and HMRC compliance.
🔴 Critical
Freelancer Address
Contractor's business address or residential address if sole trader. Required for legal notices, invoicing, and contract administration. Must be kept current. Include full postcode for accurate delivery of legal documents.
🔴 Critical
Service Title/Role
Clear title describing the professional services (e.g., "Web Development Services", "Marketing Consultancy", "Graphic Design Services"). Should describe service, not job title. Helps establish self-employed status for IR35. Sets overall scope and expectations.
🔴 Critical
Contract Date
The date the agreement is signed by both parties. Contract becomes binding from this date. Important for calculating notice periods, IP rights commencement, and establishing when contractual obligations begin. Should match or predate service start date.
🔴 Critical
Services Description
Detailed description of deliverables, outcomes, and tasks. Must be specific enough to define scope but flexible for contractor autonomy (important for IR35). Include: what will be delivered, quality standards, methodologies if relevant. Essential for managing expectations and preventing disputes.
🔴 Critical
Start Date
Date when service provision begins. Can be same as contract date or future date. Critical for payment calculations, IP ownership start, insurance requirements, and determining when contractor obligations commence. Must be clearly stated to avoid disputes.
🔴 Critical
Contract Duration
Fixed term (specific end date), ongoing (until terminated by either party), or per project/deliverable. Fixed term suits defined projects. Ongoing common for retainer arrangements. Per project for one-off work. Must specify type - affects notice periods and termination rights.
🔴 Critical
End Date (if fixed term)
Specific end date if fixed-term contract. Not needed for ongoing or per-project arrangements. Defines when contract automatically terminates unless renewed. Important for planning and expectation management. Can be extended by written agreement.
🟡 Important
Payment Structure Type
Hourly rate, fixed fee per project, or daily rate. Must be clearly specified. Hourly: time-based payment. Fixed: total amount for defined deliverables. Daily: day rate for contract work. Choice affects invoicing, risk allocation, and can influence IR35 assessment.
🔴 Critical
Hourly Rate (if applicable)
Specific hourly rate in GBP if using hourly payment structure. State whether inclusive or exclusive of VAT. Must be clearly quantified with no ambiguity. Professional rates in UK typically £30-150/hour depending on expertise and industry. Consider market rates for the service.
🔴 Critical
Maximum Hours (if hourly)
Cap on hours per week/month if using hourly rates. Protects client from unlimited costs. Typical: "40 hours per week maximum" or "160 hours per month". Not required but recommended for budget control. Contractor can propose additional hours if cap reached.
🔵 Recommended
Fixed Fee Amount (if applicable)
Total fixed amount in GBP for project-based payment. State whether inclusive or exclusive of VAT. Common for defined deliverables with clear scope. May be milestone-based (e.g., 50% on start, 50% on completion). Contractor bears risk of overruns.
🔴 Critical
Daily Rate (if applicable)
Day rate in GBP if using daily payment structure. Common in contracting/consultancy. Typically £200-1000/day depending on expertise. State whether inclusive or exclusive of VAT. Define what constitutes a "day" (typically 7-8 hours). Popular in IT/consultancy sectors.
🔴 Critical
Payment Terms (Days)
When payment is due after invoice: 7, 14, 30, or 60 days. UK standard is 30 days. Shorter terms (7-14 days) protect contractors' cash flow. Late Payment of Commercial Debts Act 1998 gives statutory right to 8% + base rate interest on late payments.
🔴 Critical
Invoicing Frequency
How often contractor submits invoices: weekly, bi-weekly, monthly, per milestone/deliverable, or on completion. Monthly is standard for ongoing work. Per milestone suits project work. Must specify to prevent payment disputes and ensure regular cash flow.
🟡 Important
Expenses Reimbursement
Whether contractor can claim expenses and what's reimbursable. Options: No expenses (contractor absorbs all costs), pre-approved expenses only, or reasonable expenses with receipts. Contractor bearing own costs supports self-employed status for IR35. Specify approval process and receipt requirements.
🟡 Important
VAT Status
Whether fees are inclusive or exclusive of VAT, or contractor not VAT registered. If contractor VAT registered (£90k+ turnover), must charge 20% VAT on top. Critical for accurate costing. Most quotes are "exclusive of VAT" with VAT added if applicable.
🔴 Critical
Late Payment Interest
Interest charged on late payments. Statutory right under Late Payment Act: 8% above Bank of England base rate. Can specify in contract or rely on statutory provision. Encourages prompt payment. Can also claim fixed compensation: £40 (under £1k), £70 (£1k-£10k), £100 (£10k+).
🔵 Recommended
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Work Location
Where services will be performed: fully remote, at client's premises, hybrid (remote + client site), or contractor's own premises. Contractor providing own workspace supports self-employed status for IR35. Working at client site acceptable but flexibility important for demonstrating independence.
🟡 Important
Expected Availability
Contractor's availability expectations. Should NOT specify fixed hours like "9-5 Monday-Friday" (indicates control/employment). Better: "flexible hours to meet deadlines", "available as reasonably required", or specify availability windows. Autonomy over working hours critical for IR35 self-employment status.
🔴 Critical
Notice Period
Notice period for either party to terminate: immediate/none, 1 week, 2 weeks, 1 month, or end of current project/milestone. Freelance contracts typically have shorter notice than employment (1-4 weeks common). Can be immediate for per-project work. Must be reasonable and clearly stated.
🔴 Critical
Right to Substitute
CRITICAL FOR IR35: Whether contractor can send substitute/subcontractor to perform services. Options: Yes (contractor may substitute freely), Yes with client approval (approval not unreasonably withheld), or No (personal service required). Genuine right to substitution is key indicator of self-employment for IR35.
🔴 Critical
IP Ownership
Who owns intellectual property created. Options: Client owns all IP (work for hire - most common), client owns IP upon full payment, contractor retains IP with client license, or shared ownership. Without explicit assignment, contractor retains rights under UK law. Must have clear assignment clause for client protection.
🔴 Critical
Moral Rights Waiver
Whether contractor waives moral rights (right to be identified as creator and object to derogatory treatment of work). Waiving allows client to modify work without permission and use without attribution. Standard in commercial contracts, particularly for creative work (design, writing, software). Copyright, Designs and Patents Act 1988.
🟡 Important
Pre-Existing Materials/IP
Treatment of IP contractor brings to project (pre-existing tools, templates, code libraries, frameworks, methodologies). Typically contractor retains ownership but grants client license to use within project. Specify what's included and any usage restrictions. Prevents disputes over what's "new work" vs "existing IP".
🟡 Important
Confidentiality Period
How long after contract ends contractor must keep information confidential: indefinite (most protective for true trade secrets), 5 years, 3 years, or 2 years. "Indefinite" standard for customer lists, proprietary methods, business strategies. Shorter periods (2-3 years) for time-sensitive commercial information that naturally becomes outdated.
🟡 Important
Access to Personal Data
Whether contractor processes personal data (customer info, employee data, etc). If yes, contractor is data processor under UK GDPR and requires separate Data Processing Agreement (DPA) per Article 28. Must specify: data types, processing purposes, security measures, breach notification. Critical for GDPR compliance. Data Protection Act 2018.
🔴 Critical
Professional Indemnity Insurance
Whether contractor must maintain PI insurance and minimum coverage level: not required, required with £1,000,000 minimum, or required with £2,000,000 minimum. PI covers claims from errors, negligence, breach of professional duty. Many clients require proof before contract starts. Demonstrates professional status and protects both parties.
🟡 Important
Liability Cap
Maximum contractor liability for losses/damages: unlimited liability, limited to fees paid, limited to insurance coverage, or custom amount. Common caps protect contractors from unlimited exposure. Cannot limit liability for: death/personal injury, fraud, deliberate breach, IP infringement. Higher risk projects may need higher caps - negotiable term.
🟡 Important
Custom Liability Cap Amount
Specific £ amount for liability cap if "custom amount" selected. Must be reasonable and proportionate to contract value and risk. Common to cap at 1-2x total contract value or insurance coverage. Protects contractor while giving client adequate protection. Should be negotiated based on risk profile and insurance availability.
🔵 Recommended
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IR35 Status Determination
Client's assessment of IR35 status for medium/large private sector clients: Outside IR35 (genuine self-employed business-to-business), Inside IR35 (deemed employment for tax - client deducts PAYE/NI), or To Be Determined by Client. Use HMRC's CEST tool. Status Determination Statement must be provided. Critical for tax compliance.
🔴 Critical
Tax Status Confirmation
Contractor's business structure for tax purposes: self-employed/sole trader, limited company, or partnership. Affects payment processing, VAT, and IR35 assessment. Limited company contractors often outside IR35 if genuine business relationship demonstrated. Must declare to client for proper invoicing and tax treatment. Sole traders assessed same way as limited companies for IR35.
🟡 Important
Additional Clauses or Requirements
Any specific additional terms: non-compete period post-contract, non-solicitation of clients/staff, equipment to be provided by contractor, required software licenses, specific deliverable timelines, performance milestones, quality standards, or other bespoke requirements. Optional but useful for tailoring contract to specific needs. Keep reasonable to maintain enforceability.
🔵 Recommended
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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 freelance contract covers all 36 compliance points with legally-sound wording. It includes automatic IR35 compliance checks, payment term calculations, IP ownership clauses, professional indemnity requirements, and GDPR provisions. Available in both Interview Mode (guided) and Editor Mode (direct editing) for just £10.
📝 Draft Your Own Contract
Use this checklist as your guide, but remember: getting the legal wording correct is complex. IR35 status determination, IP assignment clauses, liability caps, confidentiality provisions, and data processing requirements demand precise language. A single error can result in HMRC investigations, IP disputes, or breach of contract claims.
⚖️ Book a Legal Consultation
For complex situations, high-value contracts, or specialized services requiring bespoke terms, consider booking a consultation with our legal professionals for personalized advice tailored to your specific circumstances.
Need personalized legal advice? Book a consultation →