Free UK Contract Templates

Frequently asked questions

What makes a UK contract different from a US contract?+

UK contracts must comply with a distinct legal framework that does not exist in the US. Key differences include IR35 off-payroll working rules (which determine how contractors operating through limited companies are taxed), the three-tier worker status system (employee / worker / self-employed), UK GDPR and the Data Use and Access Act 2025, the Copyright, Designs and Patents Act 1988 (copyright vests in freelancers by default, not the client), and the Late Payment of Commercial Debts (Interest) Act 1998. Terms like "at-will employment" do not exist in the UK — workers have statutory protections from day one for certain rights including SSP from 6 April 2026.

What is IR35 and does it affect my contract in 2026?+

IR35 (off-payroll working rules) determines whether a contractor operating through their own limited company should be taxed as an employee by the end client. From 6 April 2026, the small company threshold was raised to £15M annual turnover and £7.5M balance sheet total (up from £10.2M and £5.1M). Companies meeting 2 of 3 small company criteria are now exempt — contractors working for those clients can self-assess their own IR35 status. For medium and large clients, the end client must issue a Status Determination Statement (SDS). Courts and HMRC look at the reality of the relationship — specifically control, substitution rights, and mutuality of obligation — not just what the contract says. Our UK IC agreement template includes IR35-relevant clauses covering all three tests.

Am I a worker, employee, or self-employed under UK law?+

The UK has three tiers: employee (full statutory employment rights), worker (intermediate rights — national minimum wage, holiday pay, rest breaks), and genuinely self-employed (no statutory employment rights). Classification is determined by the reality of the working relationship, not just the contract label, as confirmed by the Supreme Court in Uber BV v Aslam [2021] UKSC 5. The Employment Rights Act 2025 (Royal Assent 18 December 2025) did not introduce a new statutory classification test — the three-tier framework and case-law based tests remain in force. If HMRC or a tribunal finds you are actually a worker or employee, contract clauses to the contrary will be disregarded.

What data protection clauses must a UK contract include?+

UK contracts involving personal data must comply with UK GDPR (retained under the Data Protection Act 2018) as updated by the Data (Use and Access) Act 2025 (most provisions in force from 5 February 2026). Required clauses include: lawful basis for processing, controller/processor designation, Article 28 processor obligations where one party processes data on behalf of another, data breach notification within 72 hours to the ICO, and data retention and deletion obligations. The DUA 2025 narrows DSAR search obligations to a "reasonable and proportionate" standard — previously, exhaustive searches of all systems were expected.

What is the UK VAT threshold in 2026?+

The UK VAT registration threshold is £90,000 as of April 2026, unchanged from April 2024 when it was raised from £85,000. If your taxable turnover exceeds £90,000 in any rolling 12-month period, you must register for VAT within 30 days. The deregistration threshold is £88,000. Our UK freelance contract and IC agreement templates include optional VAT number fields and a clause requiring VAT to be invoiced and paid on top of agreed fees where applicable. Despite earlier speculation, the 2025 Autumn Budget did not reduce the threshold.

Who owns copyright in work a UK freelancer creates?+

Under section 11(2) of the Copyright, Designs and Patents Act 1988, copyright in works created in the course of employment vests automatically in the employer. For genuinely self-employed freelancers, copyright in commissioned work vests in the creator (the freelancer) unless expressly assigned in writing under section 90 CDPA 1988. A verbal or implied assignment is not sufficient — the assignment must be in writing signed by both parties. Our UK freelance, photography and IC agreement templates include clear IP assignment or licence options specifying exactly what rights transfer to the client upon payment, including an option for moral rights waiver.