A guide to taking holidays as a freelancer or contractor
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 mustnt 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 doesnt 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 fortaking 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
Since new public sector IR35 rules came into effect on 6 April, freelancers and contractors working in the public sector must be very careful that they are not caught by IR35 and open to a damaging tax hit. more»