A contractor agreement does two jobs at once: it sets out the commercial terms, and it documents the working relationship for IR35 purposes. The clauses below — substitution, control, mutuality of obligation — aren't padding; they're the specific evidence HMRC looks at if the engagement is challenged. Get them right and the agreement is short.
Direct answer
Engaging a freelancer or contractor in the UK? This template covers the basics — services, fees, IP, liability — and is written with IR35 'outside' status in mind. Use the key facts, step list and official source links on this page to confirm the decision before you spend money or register anything.
Contractor services agreement
Section 01
The IR35 essentials baked into this template
- Substitution clause — the contractor can send someone else (the strongest IR35 indicator).
- Control language — the contractor decides how the work is done.
- No mutuality of obligation — no guaranteed ongoing work, no obligation to accept it.
- No employee benefits — no holiday pay, sick pay, pension or notice equivalents.
- Right to work for others — confirms the contractor is in business on their own account.
Section 02
What to fill in before signing
- Schedule 1 — describe the services and deliverables in specific terms.
- Fee structure — day rate, hourly or fixed fee with payment terms.
- Insurance limits — match what the contractor actually holds (most freelancers carry £1m PI and £1m PL).
- Termination notice — 30 days is normal; shorter for short engagements.
Section 03
When to upgrade to a longer form
Use a bespoke agreement (drafted by a lawyer) when: the engagement is over £100k, involves regulated activity, requires complex IP assignments, or the contractor will be on-site at customer premises. A £400 solicitor review is cheap insurance on a £150k contract.
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