Consultancy services

Many businesses bring in consultants, typically on a temporary basis, for their expertise in particular areas (such as design or integration services) or to support a one-off project (such as an audit). These consultancy services are usually provided to the customer under a consultancy services contract. The consultancy services can be provided either by a consultancy company, who would then supply individual consultants to provide the services, or through contracting with an individual consultant directly.

As with most service agreements, the nature of the consultancy services to be provided must be clearly defined. Consultants are independent contractors and not employees of the customer; however, take care where they have been hired for ongoing projects, and where they are working exclusively or predominantly for one customer so as to ensure they are true consultancy arrangements. Otherwise, if a consultant is deemed to be employed by a customer, there will be employment and tax law consequences.

This subtopic contains a range of materials concerning consultancy services and the key considerations relating to this type of arrangement.

Status of employment contracts, consultancy contracts and other contracts to do work or perform services

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Cabinet Office updates PPNs on data protection and payment spot checks

The Cabinet Office has added two new Procurement Policy Notes (PPNs) to the suite of PPNs republished in conjunction with the Procurement Act 2023 (PA 2023) go-live—PPN 020: Guidance on data protection legislation and PPN 021: Payment Spot Checks in Public Sub-Contracts. PPN 020: Guidance on data protection legislation provides updated guidance on relevant data protection requirements under the UK GDPR and the UK International Data Transfer Agreement (IDTA) governing the export of personal data from the UK. PPN 020 applies with immediate effect. It replaces PPN 03/22 which contained streamlined guidance and updated model clauses to take account of the UK’s exit from the EU. It also includes guidance on international transfers of personal data. PPN 020 does not constitute a change in policy, but in-scope organisations should circulate and adhere to the guidance and use the updated model clauses at Annex A for new contracts. PPN 021: Payment Spot Checks in Public Sub-Contracts provides guidance and templates for contracting authorities to spot check public contract supply chains to ensure suppliers meet the payment terms set out in PA 2023. PPN 021 includes additional guidance on how in-scope organisations should conduct spot checks to ensure the correct payment terms are being included and adhered to by suppliers, plus model terms at Annex A which support spot checks being carried out. PPN 021 applies from 1 October 2025. Both PPNs apply to all central government departments, their executive agencies and non-departmental public bodies.

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