Freelancer confidence hits record high

Friday 24 July 2015

The latest quarterly Freelancer Confidence Index from the Association of Independent Professionals and the Self Employed (IPSE) has revealed that freelancers and contractors are feeling more optimistic than ever about their economic prospects for the coming 12 months.

Overall, 41 per cent of those surveyed felt their business would improve over the next year, compared to 25 per cent who said they did not feel as confident, marking a record result for the survey.

These findings are even more encouraging in light of the survey’s other result, which was the potential for rising costs in the near future. A total of 46 per cent said they expected their business expenses to increase, possibly as a result of recent changes announced in George Osborne’s budget. These include potential reform of the current IR35 structure, as well as a change in the way dividends are taxed.

The change to dividends is a major concern for contractors who operate through a limited company, as under present rules, if they take the majority of their income as a dividend, they are in a more advantageous position in terms of tax.

The findings suggest that despite concerns about the business marketplace for the self employed, there is still plenty of opportunity for sole traders, as well as other professionals considering taking this route.

IPSE chief executive Chris Bryce welcomed the finding, saying: “It’s great to see people who work for themselves are confident in their business prospects even as they report their business costs increasing. We’re very concerned that the tough measures outlined in the Summer Budget will push costs up to the extent that many freelancers will reconsider their line of work.”

“The UK needs a robust, confident self-employed community to give our labour market the flexibility it needs to compete in a global marketplace. The people who take the risks associated with self-employment need to be supported in their endeavours.”

Confidence in the UK economy as a whole has also risen since the previous quarter, from 12.1 per cent to 16.1 per cent, showing that the success of contractors is closely related to the prosperity of the country as a whole.

The survey was conducted by Upwork, an online collaboration tool for freelancers working remotely. Rich Pearson, the company’s senior vice president of marketing and communications, said: “A confident freelance community is good for the economy. Experts predict that by 2025, online talent platforms could boost global GDP by £1.74 trillion, so it’s encouraging to see this group feeling so buoyant. While high business costs could discourage people from making the leap to work for themselves, sentiment among freelancers gives us hope that they will continue to thrive despite those challenges.”

However, there was a slight drop in the numbers of freelancers under contract at the time of the survey, which went from 82 per cent to 80 per cent. While a decrease in this area is never ideal, the figures themselves remain promisingly high.

This suggests that the amount of business available is remaining more or less steady, which is encouraging news, whether you’re already a contractor, or considering dipping your toe in the water.

By Victoria McDonnell

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