IR35 causing contractor confidence to dive

(3 minutes to read)

IPSE: ‘The drop in freelancers’ business confidence is all the more striking because it comes at a time when their confidence in the wider economy is actually starting to recover’.

Government tax policies and regulations are causing contractors’ confidence for the next three months to be driven to a six-year low.

This is according to the IPSE’s (Association of Independent Professionals and the Self-Employed)and PeoplePerHour’s latest Confidence Index.

Inna Yordanova, Senior Researcher at IPSE, explained, “Freelancers’ confidence in their business performance has reached record lows and this seems to be because of fears about the changes to IR35 due in the private sector in April.

“The IR35 changes appear to be behind the confidence dive because confidence has fallen sharply in the two groups that will be affected most by them: SOC1 and 2 freelancers. In fact, if you focus on these groups, which include managers, directors, senior officials and professional occupations, their confidence has truly plummeted this quarter.”

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Yordanova added, “The drop in freelancers’ business confidence is all the more striking because it comes at a time when their confidence in the wider economy is actually starting to recover.

“This alarming slump in freelancer confidence should be a wake-up call to government. The changes to IR35 are causing alarm right across the freelance sector and they should be halted before they do serious damage to this vital part of the workforce.”

Xenios Thrasyvoulou, founder and CEO of PeoplePerHour, added, “I am disappointed, but not surprised, to see another fall in freelancer confidence this quarter, to the lowest in six years. It seems that whilst freelancers are more confident about the wider economy, their confidence in their own industry has fallen off a cliff, thanks to the IR35 changes coming into play in April.

“There is still a chance for government to address these issues and listen to the concerns of this important industry, before more damage is done”

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