Self Employed Subcontractor Agreements
These solicitor drafted, up-to-date Self Employed Sub-contractor Agreements give main contractors (through their use of sub-contractors) considerable flexibility in rendering their services, allowing for an increase in working capacity and, in many cases, in specialist knowledge or skills. These templates are designed to reduce the risk of the individual who is a sub-contractor being deemed a de-facto employee of the contractor rather than a self-employed sub-contractor. The self-employed subcontractors are contracted as individuals (sole traders).
What are the Applications for these Subcontractor Agreements?
The first four options are suitable for the construction industry, but can also be applied to a range of other activities. The Construction Subcontractor Agreement is the most simple agreement, suitable for general subcontracting of trades-people on small, short-term projects. It provides for minimal client confidentiality risk, payment after invoice submission, and it allows the subcontractor to engage substitute worker(s) . It is the most frequently downloaded template within this selection.
The Fixed Term Subcontractor Agreement is a time-bound contract with defined start and end dates; includes liquidated damages clause for late completion, strong non-solicitation and non-compete clauses, robust confidentiality and data protection and indemnity clauses; and allows for worker substitution. It is best suited to project based subcontracting. Whilst designed for construction activities such as build/fitout teams, it can also be applied to other uses such as IT installations.
The Fixed Fee Subcontractor Agreement is an open-term contract with no set term and can be used on a rolling open-ended basis. Payment is fixed for the scope of the work regardless of time and resources taken to complete. It contains standard non-compete, confidentiality and indemnity protections. It provides the subcontractor with discretion over work methods and staffing, and is less aggressive than the fixed term contract in respect of performance. Whilst designed for the construction industry it can also be applied to creative and consultant activities such as graphic design, IT support or one-off consultancy where the scope of the work is defined but timeframes are flexible. It is suitable for independent professionals who prefer fixed pricing.
The Variable Fee Subcontractor Agreement key features provide for a variable compensation model where the fee(s) can be a percentage of the project revenue or time based such as hourly, daily, or weekly rates. It contains strong confidentiality, data protection and indemnity clauses, and allows for worker substitution. It is suitable for work tied to project success or ongoing duration. In addition to construction it can be adapted to apply to a variety of commission style engagements such as sales affiliates, recruiters of marketing subcontractors; arrangements where payment fluctuates based on deliverables or client invoicing; and subcontractors working on long-term or revenue dependent contracts.
The final template, the IT Subcontractor Agreement, is significantly different from the above contracts. It is specifically tailored for IT support services and precisely aligned to client-facing work. It explicitly links to the "Main (client) Contract"; contains separate schedules for equipment, software and data processing; provides extensive data protection and GDPR clauses (and optional data processing agreement); includes comprehensive confidentiality and IP protection; allows explicit right for worker substitution; and provides optional ADR and arbitration clause. It is ideal for client-facing IT consultants and support subcontractors involved in software development, maintenance or troubleshooting, contracts managing sensitive data and/or requiring strong GDPR compliance. It is also ideal for service providers wishing to maintain clear distance from subcontractors for IR35 or liability purposes.
To help clarify self-employment and IR35 issues please also download Guidance Note on Employment, Self-employment, and IR35 and Employment, Self-employment and IR35 Checklists. If unsure on your status please get professional legal and/or tax advice.
Self Employed Subcontractor Agreements is part of Employment. Just £38.50 + VAT provides unlimited downloads from Employment for 1 year.
Frequently Asked Questions
I am a main contractor who wants to bring in a sole-trader tradesperson for a short construction job. Which template should I use? +
Use the Construction Subcontractor Agreement. It is the simplest option in this sub-folder and is designed for general subcontracting of tradespeople on small, short-term projects. It covers payment after invoice submission, minimal confidentiality obligations and an express right for the subcontractor to send a substitute worker. All five templates here apply only where the subcontractor is an individual (sole trader), not a limited company. If the subcontractor operates through their own company, you need a separate PSC Contractors Agreement.
My subcontract work will last several months and I need strong protections against the subcontractor poaching clients or starting up in competition. Which agreement covers that? +
Choose the Fixed Term Subcontractor Agreement. It is a time-bound contract with defined start and end dates and includes a liquidated damages clause for late completion, along with strong non-solicitation and non-compete clauses. It also contains robust confidentiality, data protection and indemnity provisions and allows for worker substitution. It is best suited to project-based subcontracting, particularly in construction or build-and-fit-out work, though it can also apply to IT installations and similar projects.
I pay my subcontractors based on project revenue or day rates that change between jobs. Is there a template built for that kind of arrangement? +
Yes, a template exists for variable-fee subcontracting, but a contract alone does not determine status. The Variable Fee Subcontractor Agreement is designed for exactly this situation. It provides a variable compensation model where fees can be set as a percentage of project revenue or on a time basis such as hourly, daily or weekly rates. It includes strong confidentiality, data protection and indemnity clauses and allows for worker substitution. Beyond construction it can be adapted for commission-style engagements such as sales affiliates, recruiters or marketing subcontractors where payment fluctuates based on deliverables or client invoicing. Bear in mind that the template label does not by itself make the relationship genuinely self-employed. Per GOV.UK guidance, the status is determined by the real nature of the working relationship, not what an employer or engager chooses to call it, so a substitution clause only helps if it is a genuine, largely unrestricted right that reflects what happens in practice. If it does not, it can be treated as a sham and the individual may be a worker or employee entitled to statutory rights such as national minimum wage and holiday pay regardless of the contract.
Can using a subcontractor agreement template guarantee that HMRC will treat my subcontractor as self-employed rather than an employee? +
No. A well-drafted agreement reduces the risk of reclassification but cannot guarantee it. HMRC considers the actual working arrangements, not only what the contract says. Key factors include whether the contractor controls how, when and where the work is done, whether the subcontractor can send a substitute and whether there is mutuality of obligation. If HMRC decides the individual is a de-facto employee, unpaid PAYE and National Insurance become the main contractor's liability. Simply-Docs recommends taking professional legal and tax advice before using any of these templates.
I am engaging a sole-trader subcontractor on a construction project. Do I need to worry about IR35, and does that affect which agreement I use? +
IR35 does not apply to sole traders working directly, because the off-payroll working rules apply only where a worker provides services through an intermediary such as a limited company or personal service company. However, employment status still matters: HMRC can challenge whether a sole-trader subcontractor is genuinely self-employed using the same underlying tests of control, substitution and mutuality of obligation. If your subcontractor operates through their own company, use a PSC Contractors Agreement instead. For further guidance, Simply-Docs provides a companion Guidance Note on Employment, Self-employment and IR35.
My subcontractor will be working on a construction site. Do I need to think about the Construction Industry Scheme as well as the subcontractor agreement? +
Usually, but only if you count as a CIS 'contractor'. The Construction Industry Scheme (CIS) is a separate HMRC tax obligation running alongside the contract. You are a contractor if you run a mainstream construction business, or if you are a 'deemed' contractor whose construction spend exceeds £3 million in any rolling 12 month period. Private householders are not counted as contractors so are not covered by the scheme, and most non-construction businesses below that threshold need not operate CIS at all. Where CIS does apply, you must register for CIS and verify your subcontractor's status with HMRC before the first payment. Deduct 20% from labour payments if the subcontractor is registered under CIS, or 30% if not, as an advance on their tax. There is also a 0% rate where the subcontractor holds gross payment status, and some payments can be exempt, for example a contract worth less than £1,000 excluding materials (you must call the CIS helpline to get an exemption). CIS registration does not confirm self-employment for employment law purposes: HMRC assesses employment status separately. Seek professional tax advice if uncertain.
I need to engage a subcontractor for IT support work involving client data and GDPR compliance. Is there a suitable template in this sub-folder? +
For client-facing IT support involving client data and GDPR compliance, the IT Subcontractor Agreement is specifically designed for this situation and explicitly links to the main client contract. It includes separate schedules for equipment, software and data processing, extensive GDPR and data protection clauses with an optional data processing agreement, comprehensive confidentiality and intellectual property protection, an express right for worker substitution and an optional alternative dispute resolution and arbitration clause. It suits subcontractors involved in software development, maintenance or troubleshooting. It also suits engagements requiring strong GDPR compliance or clear distance from the subcontractor for liability purposes.
