Essential clauses for subcontracting work in the UK

Sort the agreement before anyone lifts a finger

Subcontracting is one of the most practical ways for a UK freelancer or small business to take on more work than you could manage alone. It also creates the kind of disputes that are painful to untangle once a project is half-finished and everyone's patience is thin. A short written agreement — even an exchange of emails that sets out the key terms and gets a reply saying "agreed" — is worth far more than a friendly handshake. The clauses below are the ones that most often keep people out of trouble.

Scope: describe exactly what you are buying

Vagueness about scope causes more arguments than money ever does. Both sides should be able to read the clause and point to a list of things that will be delivered. Cover the following explicitly:

• The deliverables, described concretely — "a 12-page WordPress site with a booking form and payment integration", not "website work".
• Milestones and target dates, including what depends on the other party (content supplied, access granted, feedback returned).
• The number of revision rounds included, and the day rate for anything beyond that.
• What is expressly out of scope, so a small request does not quietly become three weeks of unpaid work.
• Who supplies materials, licences, stock imagery, hosting or equipment, and who pays for them.

If the project will grow, build in a simple change-control process: any variation must be agreed in writing with the effect on fees and timing stated. It feels fussy for a two-week job. It saves a fortnight of resentment on a six-month one.

Payment terms that survive real life

Agree the fee, the rate for extra work, and what counts as an expense that will be reimbursed. Then set out how and when money moves. A deposit before work starts is normal and entirely reasonable; 25–50 per cent upfront is common in creative and trades work.

Be specific about invoicing: who invoices whom, on what dates, how it is submitted, and the payment window. Thirty days is standard in the UK, fourteen for smaller jobs. If a payment runs late, the Late Payment of Commercial Debts (Interest) Act 1998 lets you charge statutory interest at 8 per cent above the Bank of England base rate, plus fixed compensation of £40 to £100 depending on the debt. Mention it in the contract — it changes behaviour.

Two UK-specific details are easy to forget. If you are VAT registered, state whether fees are inclusive or exclusive. In construction, the Construction Industry Scheme means the contractor may have to deduct 20 per cent from payments to a registered subcontractor, or 30 per cent if they are not registered. Also confirm the status position: if your subcontractor works through a limited company, off-payroll working rules may place responsibility for determining status on you.

Confidentiality, intellectual property and data

Your subcontractor will see your client list, your pricing and possibly your client's confidential material. A confidentiality clause should say what must be kept private, how long for, and that it survives the end of the contract.

Intellectual property is the other half of this. State clearly that copyright and other IP in the deliverables transfers to you on final payment, or that you receive a broad licence to use and modify the work. If your subcontractor wants to show the work in their portfolio, grant that permission deliberately rather than leaving it ambiguous. Where personal data is involved, set out who is the controller and who the processor, and what security and deletion obligations apply.

Insurance and who carries the risk

Ask what cover the subcontractor holds and request evidence of it. Public liability of at least £1 million is a sensible baseline; professional indemnity matters for consultants, designers and anyone giving advice. Anyone employing staff needs employer's liability insurance by law.

Then decide how liability is shared. A cap on total liability, often set at the value of the contract or the insurance limit, is fair on both sides. Keep carve-outs for death or personal injury caused by negligence, fraud, and breach of confidentiality. Where the subcontractor is working at your client's site, make sure the insurance covers that location and activity.

Delays, defects and how to part company

Things go wrong. The contract should say what happens next. Include a period after delivery during which the subcontractor must fix defects or substandard work at no extra cost, and a reasonable window for you to report them. If a delay is the subcontractor's fault, set out the remedy you have agreed — a reduction in fees is usually simpler and more enforceable than a penalty. Genuine liquidated damages clauses are allowed in English law, but the sum must be a realistic estimate of the loss, not a punishment.

Finally, give yourselves a clean exit. Most agreements suit a notice period of 7 to 30 days for termination without cause, immediate termination for serious breach or insolvency, and a clause confirming that work in progress is handed over and any deposit for undelivered work is refunded. Add a one-line dispute clause naming mediation before court, and a statement of which UK jurisdiction governs the contract. None of this needs to be intimidating — a two-page agreement covering these points will serve you far better than a template you never read.