Consultancy Services Agreement Ireland (B2B)

Irish law draws a hard line between a contract of service, which makes someone an employee, and a contract for service, which governs an independent contractor. A consultancy agreement sits on the second side of that line. The client buys a result, the consultant decides how to produce it, and nobody owes the other holiday pay, sick pay or statutory minimum notice. The document records what is being bought, who owns the output and how the money moves, and it has to be in writing because the protection that matters most, ownership of copyright, does not pass to the client by default.

People often confuse it with neighbouring documents. A letter of engagement is the short version professional firms send. An employment contract is what you need when the person will work under your direction, inside your team, on hours you set; you will find one among our employment contracts and HR letters for Irish employers. Our consultancy services agreement is a standalone contract for a defined project or a continuing advisory role, and it sits with the other contracts and company documents for Irish businesses in our catalogue.

Status comes first. In The Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino's Pizza [2023] IESC 24, the Supreme Court set out a five-step framework. It asks whether there is remuneration for work, must the worker perform personally, does the business control what, how, when and where the work is done, do the overall facts show a business on its own account, and does any statute change the answer. The joint Code of Practice on Determining Employment Status of the Department of Social Protection, Revenue and the Workplace Relations Commission was revised in November 2024 to reflect it, and Revenue explains the questions on its page on determining the employment status of an individual for tax purposes. A contract that calls someone a consultant does not settle the point: the facts of the engagement do.

Ownership of the work product falls under the Copyright and Related Rights Act 2000. Under section 23 the author is the first owner of copyright unless the work is made by an employee in the course of employment, so a consultant keeps what it creates unless it assigns it. An assignment must be in writing and signed by or on behalf of the assignor (section 120(3)), and section 121 allows future copyright to be assigned so that it vests in the client on creation. Moral rights cannot be assigned (section 118), and a waiver under section 116 must be in writing and signed by the author.

Payment rules complete the picture. The European Communities (Late Payment in Commercial Transactions) Regulations 2012 (S.I. No. 580 of 2012) give a supplier interest at the ECB reference rate plus eight percentage points, plus a fixed compensation sum, whenever a business pays late. A registered consultant charges VAT at the standard rate of 23% on most supplies to Irish clients, public bodies that are accountable persons currently withhold professional services withholding tax, and a consultant handling the client's personal data needs a processor contract under Article 28 of the GDPR.

The classic case is a company bringing in a specialist it cannot staff internally: an IT consultant migrating systems, a lean manufacturing expert, a grants writer, an interim finance lead brought in for a year-end close. Each engagement creates documents, code or data the client will want to own and reuse, which is reason enough to sign before work starts. Consultants use the template the other way round, sending it as their standard terms so that payment periods, scope changes and liability follow their wording rather than the client's purchase order.

A second group is the former employee who goes independent and keeps working for the old employer. In practice this is where status disputes start, because the daily reality often stays the same. Change the arrangement, not just the paperwork: real control over method and hours, a genuine right to send a substitute and other clients on the books count for far more than a title.

Charities and community bodies are frequent users too, typically for fundraising, governance reviews or funder reporting, alongside the governance documents for Irish charities and clubs we publish. Sole traders can sit on either side, and many sort out their own personal legal documents for Ireland at the same time. One edge case: construction, forestry and meat processing work falls under Relevant Contracts Tax and needs a sector contract.

The opening clauses of the consultancy agreement identify each party as an individual in business or a company, with registration number and registered office. The status clause follows the Karshan questions: no obligation to offer or accept further work, method and hours left to the consultant, its own equipment and insurance, freedom to work for other clients and a promise to review the arrangement if the facts change.

• The client can object to a substitute only on grounds of skills, vetting or confidentiality, the consultant pays whoever it sends, and every substitute signs up to confidentiality, the copyright transfer and a moral rights waiver.
• Choose a daily rate, an hourly rate or a fixed fee. Day and hour work is invoiced monthly in arrears with a timesheet, a fixed fee follows the schedule you type in, and disputed invoices must be challenged within 10 business days.
• Late payment carries the statutory interest and compensation in full, with a right to suspend work 14 days after a written reminder.
• Copyright in the deliverables passes to the client as it is created, while the consultant keeps its background know-how and grants a permanent licence of anything built into them.
• If something goes wrong, each side's liability is capped at the fees paid and payable up to the claim, or at a fixed amount. Death or personal injury caused by negligence, fraud, wilful misconduct, unpaid fees and the tax and intellectual property indemnities sit outside the cap.

The rest covers confidentiality for five years (without limit for trade secrets and personal data), GDPR processor terms, insurance, optional non-solicitation of staff, termination, force majeure, anti-corruption and Irish law, with negotiation and optional mediation before court.

You start with the client: full name, address and whether it is a sole trader or a company, in which case you add the country of incorporation, the registration number (the CRO number for an Irish company) and the person signing. The consultant follows the same pattern, and a consultant company also names the individual who will mainly do the work, so the substitution and moral rights clauses can refer to that person.

The scope screen asks for the services, the deliverables and the place of work. Describe a result to be achieved, such as "a review of the warehouse picking process with recommendations", because a list of hours to attend reads like a job. You then set the start date, a fixed end date or completion of the services, and the notice period for early termination. The fee screen offers a daily rate, an hourly rate or a fixed fee, and the fixed fee opens a field for the invoicing schedule.

Later screens of the consultancy agreement cover the payment period and VAT, personal data, non-solicitation, the liability cap and insurance, and the date and email addresses for notices. The preview updates with every answer; use Back to change anything, then Finish to generate the document. Our full range of Irish legal templates covers the other paperwork the same client may need.

The most damaging mistake is treating the consultancy agreement as a shield against reclassification. A consultant who works fixed hours at a desk in your office, under your managers, on your laptop and with no real right to send anyone else may be an employee whatever the agreement says, and the business then owes PAYE, USC and PRSI with interest. The second mistake is silence on intellectual property: without a signed assignment, the client pays for a report, a codebase or a brand and ends up with a licence at best.

Payment terms cause their own trouble. Clients sometimes impose 90-day terms, yet a payment date more than 60 days after the service must be expressly agreed and must not be grossly unfair to the supplier. A clause that waives late payment interest can be struck down by the Circuit Court as grossly unfair, so the template keeps the statutory rights intact. Many consultants also take on personal data without a processor clause, leaving both sides exposed if the Data Protection Commission asks questions after a breach. Finally, parties often set the liability cap far above the fee, a figure the consultant's professional indemnity cover rarely reaches.