UK freelancer and contractor day-rates have increased in the last 12 months, but business and economic confidence has plummeted to a record low, IPSE’s Freelancer Confidence Index for July has revealed.
Despite ongoing economic uncertainty, freelancer day rates in Quarter 2 of 2017 reached their highest level recorded in IPSE’s survey, sitting at £525. This is an increase of almost 5% compared to Quarter 1.
That said, the concerning lack of freelancer and contractor confidence in their business and the UK economy cannot be ignored. Independent workers' business confidence currently sits at -25.3, with economic confidence an even lower -44.4, regardless of the fact those surveyed have spent 83% of their time working on contracts.
While factors affecting freelancer business confidence vary somewhat, each suggest that it’s time the Government perhaps rethinks its approach to UK freelancing and contracting.
81% of contractors are most concerned by Government regulation relating to the hiring of independent workers, while the same percentage have lost confidence in Theresa May and her Party's commitment to fiscal policy affecting the self-employed. Over half (59%), have signalled that the outcome of Brexit negotiations, and potentially life outside the Single Market, has impacted business confidence.
Unsurprisingly, Brexit is impacting freelancer's confidence in the economy too. Uncertainty surrounding ongoing negotiations, combined with a revised and subsequently lowered 2017 growth forecast of 1.7% from the Bank of England has led to what IPSE describe as ‘an emphatic prediction of a downturn in the UK economy.’
Although pessimistic about overall prospects for the next 12 months, there are a number of factors enhancing freelancers’ business performance. 57% of independent workers are most confident about their reputation and brand in the market. 52% believe the innovative services they provide clients will improve their business performance, while 46% are optimistic that their individual sector will experience growth in the next year.
A telling 92% of freelancers and contractors believe their business costs will increase over the next 12 months. Brexit again is thought to be the driver of these predictions, as IPSE stated: “It is likely that the biggest factor behind this is the increase in the cost of imported goods and services following the post- Brexit drop in the value of sterling.”
Suneeta Johal, IPSE’s Head of Research, Education and Training also added: “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 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 increasing their waning confidence.”
How confident are you about your business prospects?