How to deal with unplanned time off for UK Contractors

Contracting for many means being able to pick and choose when and where they work. They can take time off when they like and line up work for when they’re ready to start contracting again. 

But whilst hopefully most breaks are planned, there are times when they can appear out of the blue for any number of reasons.

Knowing how to deal with them can be tricky, so let this blog guide you on what you should do to prepare yourself and minimise the impacts. 

What to do first

Unlike permanent employees, as a contractor you do not have the same rights to financial cover that protects you for unforeseen time out of work. If you do require an emergency break from a contract (ie due to illness) you will need to do the following:

1.Inform your client as soon as possible

2. Explain the problem and how long you believe you’ll need to have off

3. Discuss your current stage within the contract so that your client is aware of the progress you’ve made so far. This also allows another contractor to start where you left off should the contract’s completion be time sensitive

4. Devise a time plan with the client so that they know when you will contact them to update them of your status

​5. Check if your contract has a ​substitution clause and if so, consider sending another contractor to cover for the time you’re off work. This will not only continue your contract at the p​l​ace you were working, but also will demonstrate that you are truly outside of IR35, ​as your personal service is not required.

Remember! If you miss a day from your contract you will not get paid. Try to get back to work as soon as you are able to so that any financial losses incurred are kept to a minimum.

How to prepare for unforeseen contracting absences

It’s a good idea to have some contingency planning now, just in case.

Ensure you have some savings: Whilst the absence itself may be out of the blue, knowing that you’ve made allowances for such circumstances happening shouldn’t be. Ensure that your future self will thank your past self, by building up a ‘warchest’ of savings that will cover any eventuality should you become unable to work.

Calculate your earnings: As a guide we suggest ensuring that your annual contract’s combined salaries will cover you for 44 weeks worth of work. This includes calculating what you will pay yourself as a salary and also how much you wish to take in dividends. Your personal contractor accountant will be able to guide you on this, and advise the best method for you personally when paying yourself for the year.

By covering 44 weeks, you have given yourself allowances for eight weeks to combine your annual holiday and any possible unforeseen absences. It will also allow time between contracts should you find yourself in the middle of a drought.

Remember! Bank holidays should be included within your personally allocated annual leave allowance, as unlike permanent employees, you are not entitled to be paid for these days.

Going one step further – get protection from the unexpected

Enlisting the services of an insurance provider that specialises in covering contractors for unexpected absences can certainly put your mind at ease. As a serious contractor, having a payment protection plan in place can mean there’s one less thing for you to worry about. 

We’d advise shopping around to find a provider that’s the best fit for you and your Limited Company. 

If worst comes to worst

If you find yourself in a position where you are not able to return to your current contract, make sure that you speak to your personal contractor accountant. You may also need your solicitor to review your contract, should there be any early-exit clauses which may affect you.

Remember! Just because you aren’t contracting it does not mean that your director’s responsibilities as a Limited Company will end. Ensure that you take a look at what is legally required of you so that you comply with Companies House regulations.

Final thoughts

Whilst unexpected breaks in contracts can be frustrating, knowing that you’ve prepared financially for them can put your mind at ease. Remember to always seek the professional advice and guidance of a trusted contractor accountancy that can take you through every step.