Freelancers are often the forgotten entrepreneurs, working quietly at home, typing or designing away. They’re usually mistaken for casual workers, students or just hobbyists.
Surely they can’t be earning much? Well that might be true for some but growing numbers of freelancers are proving to be serious business owners.
Increasingly so, freelancers are finding success in their ventures which often start as side businesses. Many are giving up their day jobs, finding that they prefer the flexibility of the freelance lifestyle and working for themselves.
So what is their impact on the economy?
It was revealed earlier this year that freelancers contributed £109bn to the UK economy in 2015 by research conducted by the Association of Independent Professionals and the Self-Employed (IPSE). The UK’s 1.91m freelancers make up around 6% of the country’s workforce. This number is only increasing. Chris Bryce, CEO of IPSE said “every day freelancers make an enormous contribution to businesses across the UK and the economy as a whole.”
Why are freelancers good for the economy?
They’re paying tax on profits
It’s in the economy’s best interest that freelancers become successful and get the help they need. If they end up growing their businesses and earning more money, that’s more income that can be taxed.
They are creating a job
They are creating a job for themselves, which then frees up a job that another person could have who prefers the traditional employee life.
They buy products and hire help
Whether this is just occasional outsourcing to another freelancer, keeping a virtual assistant or hiring an employee, a successful freelancer may find that they need help the more their business grows. This means that not only have they created their own job but they’re also creating jobs for other people.
Besides this, freelancers will be buying products to help them run their businesses. A freelancer might buy software, office supplies or rent out office space. While it can then be claimed against tax, it’s still furthering business for other people.
There’s no limit to their income
While they may not end up millionaires, there is technically no limit on the amount of money they can earn. They don’t have a set salary so their income is entirely down to them. This means that they have the potential to grow their income and therefore pay more tax than most people who have a traditional job.
They save businesses money
More businesses these days are seeing the benefits of hiring freelancers as opposed to full or part-time staff. It often saves them money and desk space if the freelancer works from home. This is money that can then be spent on growing the business in other ways.
What other benefits do you think freelancers bring to the economy? What could the government do to help freelancers continue this? Let us know your thoughts in the comments below.