How to set your consulting fees in the UK

Start with the number of days you can really sell. Most new consultants divide their old salary by 220 and call that a day rate. It's the most expensive sum in the business, because you won't bill 220 days, and nobody's paying your pension.

So work it out in this order: what you need, what the market shows, then how you'll charge. In most cases, I think you should be moving away from day rates as soon as you've got the proof to do it.

What the UK data shows

There's no good official figure. Here's what's published, side by side, with what each number really measures.

Two warnings. IT Jobs Watch counts job adverts, and I'd expect those to lean towards technology roles and agency contracts, so they aren't what an independent adviser sells direct to an owner. And one site shows about £258 a day, but that's salaries divided by 220 days, not a rate anyone charges, so it isn't in the table.

The year-on-year drop outside London is one measure over one period. I wouldn't read too much into it, though it's a reason not to assume rates only go up.

Use these numbers to sense-check your price. Don't use them to set it.

Work out the rate you need

You need three numbers: what you want to earn, what the business costs, and how many days you can bill.

That's above the IT Jobs Watch median, and within reach of its 90th percentile. It also shows the trap. At £561 a day, those same 120 days bring in £67,320. That's £20,680 short of what the example needs.

Billable days do most of the work

Nobody pays you directly for selling, writing proposals, admin, or the fortnight between projects.

Going from 100 to 140 days takes £251 off the rate you need. That's why follow-up and admin aren't side issues. Every day you stop losing to chasing can become a billable day, or a day off.

The 120 figure is my planning assumption, not published data. In your first year, I'd expect fewer. Plan for that in your savings.

Choose how you'll charge

My view: use day rates while you're building proof, then quote most work as fixed fees. A client buying a finished pricing review doesn't want to count your days. And you get paid for what you know, not for how slowly you work.

Here's the sum I'd run. A pricing review needs about 8 days. At £733 a day, that's £5,864. I'd quote £6,500 fixed, because you're carrying the risk of it taking longer, and I'd list what's included: 8 interviews, one data pull, one workshop, one written plan. If the client wants more, that's a new price.

A simple retainer works the same way. Two days a month at £733 is £1,466. You might charge £1,500 a month, on a three-month minimum, with unused time lost at the end of each month. Say so in the contract.

IR35 can affect how you price

If you work through your own limited company, the off-payroll rules may apply where you'd have been an employee if you'd worked for that client directly. Medium and large clients usually decide your status. For a small client outside the public sector, your own company decides.

From accounting periods starting on or after 6 April 2025, a company counts as small if it meets two of these: turnover up to £15 million, balance sheet up to £7.5 million, 50 employees or fewer. RSM expects most businesses to feel that first from 2027 to 2028. I'd expect more clients to count as small, so more decisions may land with you.

If you're caught, tax and National Insurance are deducted from your fee, so an inside-IR35 rate needs to be higher to leave you the same money. I'd price those contracts separately. HMRC's CEST tool gives its view of a role, and HMRC says it'll stand by the result if your information is accurate. Status turns on how you really work as well as on the contract, as I understand it, so get specialist advice on anything big. This is general information, not tax advice.

VAT

You must register if your taxable turnover passes £90,000 in any 12 months, or you expect it to in the next 30 days alone. For the example above, £88,000 is close to the line.

I'd expect most of your business clients to be VAT-registered and able to reclaim it, so adding 20% shouldn't hurt them much. £733 becomes £879.60 on the invoice. It's different if you sell to small unregistered businesses, sole traders or individuals, because the VAT is a real cost for them. Ask your accountant, and price for it before you cross the line.

Get paid on time

Late payment hurts a one-person business more than most. A £6,500 invoice paid 60 days late is your rent, not a rounding error.

• Take a deposit from new clients. I'd ask for 30% to 50%.
• Put your payment terms in the contract, and invoice on a schedule.
• For business clients, you can claim statutory interest at 8% plus the Bank of England base rate, unless your contract sets a different rate.
• You can also claim a fixed sum: £40 on a debt under £1,000, £70 from £1,000 to £9,999.99, and £100 on £10,000 or more.

The government's late payment bill was introduced in May 2026. It would cap payment terms at 60 days. It isn't law yet, and there's no start date, so don't rely on it.

Selling to individuals, such as career or life-stage clients? Consumer law applies, including a possible 14-day right to cancel. Our start-up guide covers it.

Raise your rates without losing the good clients

• Quote new clients the higher rate first. Nothing's at risk.
• Put existing clients up once a year, on a set date, with notice.
• Change the shape of the work as well as the price. A fixed fee hides the jump.
• Follow up every proposal. I'd expect more to die of silence than of price.

Our text templates include a proposal follow-up you can copy.

David Bell, founder of Real Business Systems

David helps small UK businesses get found, answer every enquiry and keep customers coming back. We sell some of the services mentioned here, and we say so where they come up.