Preheat the oven to 190°C and cover your baking tray with greaseproof paper. Ask one of your helpers to mix together the butter and sugar until pale, light and fluffy. Beat in the egg and your vanilla extract until well combined before stirring in the flour until a dough is formed.
Roll the dough out on a lightly floured work surface to a thickness of around 1cm and using a festive shaped biscuit cutter cut biscuits out of the dough. If you want to use them as Christmas decorations to impress nan and grandad on their arrival, puncture a hole in the top of your biscuit with a drinking straw. Bake the biscuits for 10 minutes, or until pale golden-brown. Set aside to harden and then cool on a wire rack.
To decorate, sift the icing sugar into a large mixing bowl and stir in enough water to create a smooth mixture. Stir in any necessary food colouring. Carefully spread the icing onto the biscuits using a knife and sprinkle on your edible decorations. Thread with ribbon once set and hang on the tree.