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How contractors should spend their Christmas

We’ve all read the stories and seen the LinkedIn updates discussing the importance of taking time off. It’s even more vital when you’re a contractor running your own business—burn-out can lead to illness, and illness can lead to losing contracts.

Christmas is, of course, the perfect time to take a break. You can enjoy time with loved ones, perhaps let your hair down at a Christmas party (or two), and even think about switching off for a while. But is it all that easy? Here, we look at some of the common questions contractors ask when it comes to making the most of the festive season.

 

Considering IR35, should I attend my client’s Christmas party?

As with most aspects of IR35, the guidelines around attending staff Christmas parties are a bit murky. Taken on its own, attending a staff party probably isn’t enough to show that you’re working inside IR35 and, as such, you’re fine to attend. That said, if attending the party is partnered with other benefits, such as a dedicated parking space and staff discount access, then HMRC may start to ask some serious questions about your IR35 status.

If you are invited to a client’s Christmas party but you’re worried about the IR35 implications, consider insisting on paying for everything yourself. This will show that you’re not receiving the same benefits as employees—a fact that will stand you in good stead should you need to prove that you’re operating outside IR35.

 

What about my own Christmas party—can I claim the tax back?

If you’re operating as a limited company, you can get tax relief of up to £150 per person on a Christmas party (strictly speaking, the allowance is for an ‘annual event’, which could be anything from a summer barbeque to a golf day). There are a few things guidelines to note, though: the event must be open to all staff; you must not exceed the £150 limit; and you can’t just make a cash claim for the money—you must actually carry out the event.

It’s worth also pointing out that the allowance includes ‘partners’ as well as staff, and the £150 allowance is applicable to them, too.

 

What’s the best strategy for working over the Christmas break?

Many businesses begin winding down through December and close between Christmas and new year. But the idea of shutting down and ignoring your workload will likely send any contractor into a fit of anxiety. Here are our top five tips for staying productive during the festive break:

1 – Get your house in order

During the busy day-to-day, it’s all too easy for receipts to not get filed, desktops to get cluttered, and finances to be neglected. Take advantage of the relative quiet time by catching up on essential admin and business.

2 – Get your skills up to scratch

When is the last time you invested some time in tending to your professional education? With a few days, or even weeks, where your inbox won’t be getting hammered, carve out some time to carry out industry training or research.

3 – Spend some time on reflecting and re-energising

Let’s face it: running a business is tough, and operating at a million miles an hour means we don’t have much time to take stock and learn the big lessons. Put aside a couple of hours over Christmas to reflect on where you are now, and where you want your business to go.

4 – Update your CV, portfolio, and profiles

Alongside doing some admin cleaning (see point 1), use the break to get your personal brand polished to perfection. Update any online profiles and portfolios with examples of your latest work and projects, and get your CV up to date.

5 – Take time off

Yes, we know. Finding the time, and mental strength, to completely unplug can be difficult. But, by taking the time to tune into life outside your work, you’ll likely find new enthusiasm and energy to go out and achieve great things in the new year.

We hope you’ve enjoyed this article. If you’re looking for more advice and tips on building your business, check out our list of resources, here. And merry Christmas!

If you’re looking for more tips and guides on running your business profitably and professionally, have a browse through our full list of resources here.

 

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