660,000 people have left the self-employed sector in the last year

(3 minutes to read)

IPSE: ‘The pandemic has had a disproportionately damaging impact on the self-employed sector in the last year, with one in eight being driven out – into employment or out of work altogether – and many more struggling with severe financial loss’.

Latest ONS data has revealed that worryingly, since the start of the pandemic, a staggering 660,000 people have left the self-employed sector.

According to recent research from the Association of Independent Professionals and the Self-Employed (IPSE), those who are still contracting have seen a devastating impact financially – particularly those who were excluded from government help.

Derek Cribb, CEO of IPSE, commented, “In the year since the first lockdown, the self-employed have suffered a shattering financial loss – especially the 1.5 million who were excluded from government support for much of this time. A large proportion of this group – particularly those working through limited companies – are also still excluded, with devastating financial consequences.

“The pandemic has had a disproportionately damaging impact on the self-employed sector in the last year, with one in eight being driven out – into employment or out of work altogether – and many more struggling with severe financial loss. More than one in five have had to take on credit card debt to get by, while one in seven have gone into their overdrafts and more than a quarter have burned through all their savings. And we have heard many much sadder stories from individual excluded freelancers. These are drastic problems that freelancers will be struggling with for years to come.”

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Cribb added, “One of the crucial causes is the complexity of self-employment in the UK: the excessive number of ways people can be freelance – from limited companies to PAYE freelancers. This systemic complexity then led to terrible individual consequences as the government struggled – and in many cases failed – to distribute support to the various and very different self-employed groups.

“We continue to call on the government to look again at excluded groups while there are still damaging restrictions in place. Looking to the future, though, we also urge the government to give the disproportionately hit self-employed sector the time and space to recover – with economic stimulus and not tax grabs. We therefore also continue to urge the government to delay and rethink the coming changes to IR35 taxation. Instead of such damaging changes, we call on the government to take a longer-term view and initiate a full review of how self-employment and self-employed taxation work in the country – with a view to simplifying this harmfully complex system.”

To find out more about contracting please contact Jessica on 01206 591 000 or email jessica.attwood@contractorumbrella.com.

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