The Association of Independent Professionals and the Self-Employed (IPSE) has said that their latest Confidence Index shows several concerning trends for contractors.
The IPSE’s recent quarterly report found that contractors worked almost an extra week compared to the previous quarter, but their day rates were cut by an average of £16.
The sharpest cuts in rates were found among associate professional and technical contractors, such as designers and technicians, who reduced their average day rate from £254 to £232.
It was also reported that many self-employed workers are concerned when it comes to taxation policy and the looming changes to the IR35 legislation.
Chloé Jepps, Head of Research at IPSE, said, “The last Confidence Index of 2020 shows several concerning trends for freelancers. First and foremost, the average freelancer was working more for less. This is because, when they were more able to work before entering this renewed lockdown, they were cutting their rates to competitively scoop up as much work as possible. It is a worry that this could translate to a longer-term downward trend in freelancer day rates.”
“Concerning, too, is that unlike the rest of the sector, managerial freelancers did not see an increase in work even before this lockdown. While others cut their day rates to get as much work as possible while the going was good, for managerial freelancers, the going never got good.
“On top of this, managerial freelancers – along with professional freelancers – are one of the groups that will be most affected by the changes to IR35 due in April. It is indicative of the damage these changes will do that, for the first time since the beginning of the pandemic, managerial and professional freelancers said that government tax policy – not coronavirus – is having the most significant negative impact on their businesses.
“Altogether, these worrying trends are a sign that now more than ever, freelancers need better government support and protection – not the threat of tax rises and damaging structural tax changes.”
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