Latest findings have shown that self-employed confidence in the economy is the lowest on record, however, as a direct result many are working more and charging higher rates.
The IPSE’s recent Confidence Index found that contractors believe the biggest factors holding back their businesses are:
- The overall state of the economy (69%)
- Brexit (65.9%)
- Government tax policy relating to the self-employed (63.5%) – likely referring to the IR35 changes set to take place in the private sector next year.
Despite the record low economic and business confidence, many self-employed workers are working more and upping their rates of pay.
For example, average day rates have gone up from £407 last quarter to £447, while the time spent not working has dropped from 3.3 weeks to 2.5 weeks, which is the lowest level in two years.
Ryan Barnett, Economic Policy Adviser at IPSE, said, “Freelancers’ economic confidence has slumped to a historic low – not just for the next three months, but the next year. Their confidence in the performance of their own businesses over the next three months has also fallen to the lowest level on record.
“Freelancers blame three things for their worryingly low confidence: overall economic instability, Brexit and government tax policy – most likely the changes to IR35 due next April.
“This quarter, the sector seems to be gearing up for tough times ahead by working and earning more.
“This earnings increase appears to be a self-driven, temporary boost for the sector – a limited positive against a backdrop of historic low confidence and deep worries about the future.
“These findings should ring loud alarm bells for all parties: not just because of the importance of the freelance sector, but also because of what this could mean for the wider economy. Because freelancers often work on growth projects at the heart of businesses, they act as a canary down the coalmine for the rest of the economy.”
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