Just like those people who have their presents and food ordered before summer has even ended, preparing your business in advance for Christmas means you can focus on seeing family and friends, relaxing in front of the TV with a selection box of chocolates, or investing some time in personal projects and side hustles if you want to boost your income.
IPSE research reveals that many freelancers could improve their business, and wellbeing, by taking more time off, with one in ten taking no days away from work in the last 12 months. And the festive season means your clients will probably also be winding down over the holidays, so there’s less pressure to rush back to tasks until the New Year.
But less client demand is likely to have implications for your income. And it’s also worth understanding the tax rules around Christmas meals and parties, with allowances available to limited companies under certain
restrictions.
Start planning to take time off at Christmas
The earlier you can schedule some time away from freelance work at Christmas, the more you can prepare yourself, and your business. Which means you can truly relax during time away from clients, rather than dealing with emails and phone calls on Christmas Day in between mouthfuls of turkey.
This includes updating your out of office email, any hours listed online (for example, your Google Business Profile), and checking your calendar for any meetings which might need to be rescheduled.
For those with children, it’s also worth checking school term dates haven’t been altered for training days.
Some freelancers and self-employed professionals will find it stressful to take significant time away from their business, but most clients and customers will be doing the same over the festive period. And by planning in advance, you can ensure that you’re covered for everything barring the biggest emergencies, allowing you to actually enjoy yourself.
Let clients know, and put an emergency plan in place
Make sure you’ve informed your clients or customers well in advance of shutting down for Christmas, and that you have a plan in place if an absolute emergency does occur.
This should mean you’re able to schedule all deadlines before you finish work for the holidays, including scheduling any content or social media updates to run over the festive period. Especially when many businesses will want to promote sales from Boxing Day, or News Years offers.
To cut down the risk of interruptions without completely disappearing, let clients know that you won’t be responding to anything unless it involves a website disappearing offline, a warehouse on fire, or a similar level of emergency. And to avoid getting distracted or caught up in checking your phone or work emails, you can set up a separate communication channel to only be used in the most urgent situations.
Include a Christmas lull in your freelance budget and savings
If you’re not working, then it’s likely your freelance income will be reduced. And even if you’re taking the minimum time away from your business, you’ll probably find potential clients or customers aren’t rushing back to work on Boxing Day.
So, it’s important to account for this when you’re planning your budget and schedule. Many businesses will be rushing to get everything done before people head home on Christmas Eve, making it a busy period before a lull until the New Year. And if the financial department aren’t in the office, it’s less likely invoices will be settled between December 24th and January 1st.
You can lessen the impact of Christmas on your business and personal budget by putting some money aside in advance, even as late as October and November. Or by taking on a temporary side hustle to earn some extra money.
Alternatively, you can see the time as an investment in your health and wellbeing, or use some of it to make your plans for 2024.
Consider Christmas greetings or gifts for clients, suppliers and colleagues
You may want to thank your clients, suppliers or colleagues for their support over the previous 12 months. And a simple card or gift can build goodwill, as well as keeping you in the mind of people returning to the office after the holidays.
Whether it’s a free email greeting, a handwritten card, or a personalised gift, it’s important to put some thought into making sure it’s likely to be well received, and avoiding embarrassing mistakes with titles, names or other details. You can record up to £50 per client as a business cost, although you’ll need to avoid food, alcohol and gifts with a transferable monetary value (e.g. gift cards).
If you want to thank collaborators or self-employed people, then we have a handy Christmas gift guide for freelancers.
Should you attend client Christmas parties and events?
Networking is a key part of promoting your freelance career or business. And clients may be holding a range of events over the holidays, giving you the chance to catch up socially and potentially meet new contacts.
Christmas drinks and networking events are both good opportunities to make new connections and build on existing relationships with clients. Just be a little cautious about overindulging and undoing your hard work through the previous year.
If you’re freelancing or self-employed through a limited company, you may want to be a little cautious about attending a client staff Christmas party. Although it’s never been a consideration so far in IR35 cases, it might not be helpful when you’re trying to show you’re not part of the company.
Tax allowances for self-employed Christmas parties or meals
If you’re freelancing and want to claim a tax allowance for a business celebration, then you’ll need to be trading through a limited company rather than as a sole trader or partnership. In this case, you’re allowed an annual amount of £150 per employee, or up to £300 if partners and spouses are also included.
But if your bill exceeds that amount, the whole cost becomes taxable. Including if that’s split across multiple events.
Don’t forget your tax return and payment
Hopefully you’ve got your accounts and taxes in order before Christmas, especially if you’re using bookkeepers or accountants who will be out of the office over the holidays. But it’s important to make sure you file your tax returns, and make any payments on time to avoid problems or fines.
For example, the Corporation Tax payment needs to be made within 9 months and 1 day after your accounting period has ended. This means if your accounts are to the end of March, the payment date will fall at the start of the next year, along with the deadline for filing annual accounts with Companies House.
If you’re a sole trader, the deadline for online returns, paying tax owed and making the first payment of the next year all occur at midnight on January 31st. And while it might seem like you’ll have time to organise everything after Christmas, the time will soon be eaten up when new and existing clients return to work full of ideas and needing freelance support.
You can find more comprehensive guides to self-employed tax on the IPSE website, and members also have access to a telephone helpline.
Take time to review your year of freelancing
Between Christmas and New Year, you may want to spend some time reviewing your successes and failures over the last 12 months. The relative peace away from client requests makes it a perfect time to see if there are things that could be improved, mistakes that might have been avoided, and ways to plan for greater success in the following year.
Look through your client list, business income and expenditure, and working practices to see if there are opportunities to increase revenue or reduce costs. And whether it’s time to set up outsourcing or automation for repetitive tasks. This will help you make plans and prepare for the following year, especially when many people might decide to leap into a new business venture at the start of a new 12 months, and find that they need freelance help in a hurry.
Spend time on your business or side projects
Alongside reviewing the previous year, the quieter holiday period can also be the perfect time to work on your business and branding. Or to invest some resources into side projects which may have languished due to your client commitments.
Most freelancers will have a long list of tasks for their website, social media profiles and other business assets which have been ignored in favour of client work throughout the year. And this is the time you can spend focusing on some of those jobs.
Reward yourself with a present
And finally, it’s important to celebrate your success in freelancing for another year. Overcoming the challenges of being your own boss and sustaining a self-employed business is something that’s important to recognise, whether you’re making seven figures or breaking even.
So, treat yourself to something for the home office, new software, or some business attire for important meetings. You can find some inspiration here, and even a fairly small purchase can make a big difference to your happiness and motivation, whether it’s a new coffee mug, some artwork or a plant. And you’ve definitely earned it.
