Holidays for freelancers and contractors

Dave Chaplin is CEO and founder of ContractorCalculator, offers up some advice on taking holidays as a freelancer or contractor.

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As a freelancer or contractor it is important to plan that time away and keep clients informed. Dave Chaplin is CEO and founder of ContractorCalculator, which offers free and comprehensive guidance online about freelancing and contracting, and here he offers up some advice on taking holidays.

As a freelancer or contractor you may take holidays, but you should never use your client’s holiday booking forms or systems; to do so could be taken as evidence that you are a ‘disguised employee’, which could have disastrous tax consequences. It is generally best from both your and your client’s point of view, to plan time off during a future contract, during the contract renewal process or before you start a new one.

Having said that, as a contractor working through your own limited company you have the flexibility to take odd days off for holidays during the term of a contract. Naturally, though, such holidays mustn’t adversely affect your work or the delivery of that contract. It is very rare that you will required to work every day during the contract period, unless the contract length is less than one month.

If you take time off during a contract then it is very unlikely you will be allowed to take more than two weeks off at a time. If there are quiet periods during your contract then most clients will let you take ad-hoc days off at very short notice. This saves them money and does not affect project deadlines. But if you wish to take long periods away from contracting, one month or more, then this really is best done between contracts.

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 holiday taken, then you would need to sign a contract renewal. This is extremely rare though.

Booking holidays

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 your existing contract, or an agreed renewal, then simply inform your project manager that you are taking a break.
  • If you strongly suspect that you will be offered a renewal which you will accept then speak to your project manager
  • If you do not think you will be offered a renewal or don’t want to renew then go ahead and book your holiday – you are the boss!
  • To stay outside IR35, you must avoid acting like an employee – so never use any of your client’s holiday booking procedures and do not allow yourself to be controlled by the client.

When looking for a new contract

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 on any holidays for more than a week within the first month of a new contract. This could affect your chances of securing the contract.
  • Wait until you have received an offer before you mention that you have holiday booked. Having holidays booked might spoil your chances to be chosen for an interview and you will fall at the first hurdle.
  • After receiving a contract offer, if you have holidays booked, then check with the client that you can take time off before signing the contract.

If you wish to take time off for more than three weeks then this will probably need to be done between contracts. Bear in mind that on your return from holiday it could take between one week and a month to secure a new contract.

For this reason, if your planned holiday is less than three weeks it is better to plan it during an existing contract, so that you have something to come back to immediately. If you did take 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 to be your own boss and give yourself some time off!

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