This summer, with its grey, cool, rainy days may not be the best time to be a holidaymaker in the UK. But according to new research by IPSE, it’s also not a great time to be a freelancer.
Confidence at a New Low
IPSE’s Confidence Index for Q2 2017 showed that freelance confidence as at an all-time low since their records began.
Only 19% of freelancers felt confident about their business performance over the next 12 months and 52% said their confidence has decreased.
When asked about the top factors lowering business performance, government regulation relating to hiring freelancers was identified as a factor by 81%. 81% also identified government fiscal policies relating to freelancing as a factor, while 59% felt the outcome of the EU referendum was a major factor.
Two-thirds of freelancers also expressed grave concerns about the wider economy with 69 percent of respondents predicting a major slowdown in the economy. The three-month economic confidence index score is now down to its second-lowest level since the all-time low it hit post-EU referendum.
The Cost of Doing Business
92% of freelancers also said they expect their business costs to increase over the next year. Only 4% expected business costs to fall.
While freelancers’ average quarterly earnings have grown by 3.6% since Q1 and their day rates seem to be holding strong, 55% of respondents say they expect those rates to drop over the next 12 months. Freelancers are currently working for 83% of their time, down just slightly from Q1’s figure of 85%.
Suneeta Johal, IPSE Head of Research, Education and Training, said: “Freelancers attribute their loss of confidence to the economic pressure from Brexit and the negative consequences of government policy relating to the regulation and taxation of freelance work. This can be linked to the roll-out of changes to the taxation of freelancers working in the public sector.
“The good news is that these negative drivers are all within the control of the government and, if addressed, could and should help alleviate concerns. Successful Brexit negotiations and reassuring freelancers of their tax status would go some way to increase their waning confidence.”
‘Freelancers Have Never Been Convinced’
The report seems to confirm that freelancers’ fears for their business success in a Brexit-threatened and post-Brexit economy, voiced in previous IPSE reports, were well-founded.
Professor Andrew Burke, Dean of Trinity Business School, Dublin, and Chair of the Centre for Research on Self-Employment, co-authored the report. He said: “Freelancers have never been convinced that the UK economy would avoid any major negative consequences from Brexit. That view is now held more widely than ever. Freelancers accurately predicted the slowdown of the economy in 2017, therefore their rapidly dwindling confidence in the UK economy over the next 12 months is somewhat alarming.
“The managerial, professional and technology-based freelancers in this survey are in a position to observe the early indicators of a slowing economy as they are typically contracted on projects involving business growth, innovation, technological change and entrepreneurship. They are clearly observing their business clients scaling down plans for firm growth and innovation. These findings are very concerning indeed.”