Question 1

What is a kill fee?

Accepted Answer

A kill fee (also called a cancellation fee or cancellation compensation) is a contractually agreed amount payable by a client if they cancel a project after work has commenced. It compensates the freelancer or consultant for lost scheduling opportunity — the time held in their diary that could have been sold to another client. Standard kill fees range from 30% to 50% of the remaining project value.

Question 2

Are kill fees legally enforceable in the UK?

Accepted Answer

Yes, provided the amount is a genuine pre-estimate of loss and not a penalty clause. The Supreme Court in Cavendish Square Holding BV v Makdessi [2015] UKSC 67 confirmed that a clause is enforceable if it protects a legitimate business interest and is not extravagant relative to that interest. A kill fee framed as "compensation for lost scheduling opportunity equal to 50% of the remaining fee" satisfies this test for most professional engagements.

Question 3

What notice period should I require in a retainer agreement?

Accepted Answer

30 days is the minimum recommended for monthly retainers — it gives you one full billing cycle to replace the revenue. For higher-value or specialist retainers (£5,000+/month), 60 days is standard and easily justifiable. The notice clause should specify that notice must be given in writing and that the fee is payable during the notice period regardless of whether the client uses your services.

Question 4

Can I charge a kill fee if I don't have one in my contract?

Accepted Answer

No. Without a written kill fee clause, your only remedy for cancellation is to invoice for work completed and delivered — you cannot charge for the work you were expecting to do. This is why kill fees must be agreed before the project starts, not after the client cancels.

Question 5

Does the Late Payment Act apply to kill fees?

Accepted Answer

Yes. Once a kill fee invoice becomes due under the contract, it is treated as a commercial debt. If the client fails to pay, statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998 accrues from the due date, plus the fixed compensation fee of £40–£100 depending on the debt size.

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Kill fees explained