Tax & admin 16 June 2017

A guide to taking holidays as a freelancer or contractor

Holidays as a freelancer
When taking holidays as a freelancer, it’s important not to ask, but inform your client of your plans

Drawing on his expertise for Business Advice readers, Dave Chaplin, CEO and founder of ContractorCalculator, provides tips for taking holidays as a freelancer or contractor.

The traditional holiday season is almost upon us and as a freelancer or contractor it is important to plan that time away and keep clients informed. Use the following tips to make sure you give yourself the best deal.

Don’t use client booking systems

As a freelancer or contractor you can arrange time with the client when you do not supply your services, but you should never use your client’s holiday booking forms or systems and appear to have to ask or get consent – to do so is one of the top ten traps that could be used as evidence that you are a “deemed employee” under IR35, which could have disastrous tax consequences.

The best time to plan future absences is before starting a contract or during any contract renewal process.

It’s important for you not to ask for holiday, but instead inform the client as a courtesy that you will not be available. A subtle difference, whereby the former indicates you are controlled, and therefore potentially subject to IR35.

Be flexible and sensible

As a contractor working through your own limited company you have the flexibility to take odd days off during the contract. Naturally, though, such time away mustn’t adversely affect your work or the delivery of that contract.

It is very rare that you will be required to work every day during the contract period, unless the contract length is less than one month, or you are offshore on an oil rig have no choice.

During a contract it is very unlikely you will be allowed to not be present for more than two weeks off at a time. If there are quiet periods during your contract then most clients will not mind if you take ad-hoc days off at very short notice.

They don’t pay you anyway, and the project doesn’t suffer. Taking long periods away from contracting, one month or more, is best done between contracts. And it could take a few weeks once you return to secure a new contract.

There’s no limit to days off

You are not limited to a certain number of days per year, because your time off is not paid by the client. You can take as many days off as you want, provided the client agrees that you do not need to provide your services during that time.

Taking holidays in no way changes the length of your contract. Contracts have a fixed start and end date. If the client wants you to extend your contract for a few weeks, to cover for potential time off taken, then you would need to sign a contract renewal. This is extremely rare though.

Some golden rules for taking holidays as a freelancer

There are no set rules for how to book holidays when you are a contractor, although the key is to ensure you keep your client happy.

Some golden rules include:

  • If you want time off during an existing contract, inform your project manager
  • If you expect to be offered a contract renewal speak to your project manager
  • With or without a renewal book your holiday – you are the boss
  • To stay outside IR35, do not use client holiday procedures as if you were an employee
  • When you are looking for a new contract you might have a holiday already booked, which you would need to take during that contract

Best practice for managing such a situation includes:

  • Don’t plan holidays of more than a week within the first month of a new contract
  • Wait until you have received an offer before discussing holiday plans
  • After receiving a contract offer, check with the client about planned holidays before signing the contract

If it is agreed that you will not have to provide your services between certain dates then write it in the contract. But don’t call it holiday, just say there will be a break in services being provided.

If you do take a holiday at the end of your contract you could attempt to line up a new contract ready for your return. However, most clients hire contractors on very short notice, usually less than one month, and the process can take a couple of weeks.

If you take all this into account you can take a well-earned break without worrying – after all, one of the benefits of working for yourself is that you can give yourself some time off

Dave Chaplin is CEO and founder of ContractorCalculator, a comprehensive online resource for freelancers and contractors

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