The freelance sector is making a comeback, say IPSE
New research from IPSE has found that 39% of Brits have considered freelancing, signalling good news for the sector which has seen a dramatic fall in workers since 2019.
This is despite the significant impact of IR35 reform and amid calls for increased government support to protect a sector of the labour market worth an estimated £303bn to the UK economy, according to IPSE.
A third of employees (33%) believe that they could make more money as self-employed workers, but improved pay was just one of the motivations that this research uncovered.
For almost half of workers (49%), flexibility is the main factor driving their interest in freelancing, followed closely by an improved work-life balance (48%) and being their own boss (48%).
And almost three-quarters of UK workers (72%) are of the view that the self-employed –- including freelancers and contractors – make a fairly or very positive contribution to the UK economy and society.
‘Freelancing is back!’
Commenting on the study, Derek Cribb, CEO at IPSE said: “After 11 years of continuous growth, the number of self-employed workers has fallen dramatically, decreasing by 800,000 individuals since 2019.
“While many commentators worried that numbers of self-employed workers might continue to fall post-pandemic, today’s research clearly shows that freelancing is back!
“Brits are still keen to pursue freelancing, with a significant number thinking about swapping their full-time job for the dynamism, freedom and creativity of self-employment.”
This research shows that freelancing is highly regarded, too, and offers benefits that many workers have started to see since 2020, with enforced remote working giving staff a taste of increased flexibility and a better work-life balance.
Greater support is needed for self-employed workers
While interest in freelancing is high, industry experts and commentators have called for more government support to protect freelancers and contractors, who are up against a number of challenges currently – from the cost of living crisis to IR35 reform.
For example, the Public Accounts Committee, which recently published the findings of its review of IR35 reform, highlighted “fundamental problems” with the rules.
IPSE’s research bears this out, with 22% of respondents identifying the complexity of the tax system as a reason that they would not consider freelancing. A further 25% cited the loss of sick pay and holiday pay as deterrents, too.
Also sharing his view on the importance of the independent workforce was Qdos Contractor CEO, Seb Maley, who said “the value of freelancers and contractors to the businesses, society and the economy has arguably never been greater.”
“Even so, the government must do much more to support the self-employed – from creating a friendlier, fairer tax landscape to putting a stop to late payment once and for all,” he added.
Even before the IR35 reform, I was a ‘true’ contractor: working across multiple clients at the same time, setting my hours/days, substituting other team members when needed. Our micro company had almost no business after the IR35 rules changed, despite us informing our clients that we would be well and truly outside IR35 if in contract with them. I was forced to take a ‘fixed term’ employment contract, just to keep the lights on. Not what I wanted, and not what our clients wanted either. Finally, clients are now realising that they can indeed hire me on an hourly rate or project delivery basis for when they need the unique skills I can offer them. It’s much better for them (lower overall costs) and much better for us (more interesting and suitable business).
If the outcome of all of this is that all of the ‘perma-lancers’ (ppl who are working for the same client, for years and years, 5 days a week, 8 hours a day, but on a day rate contract, but effectively permanent staff) have finally either been taken into employment or have given up and retired, then this is only a good thing. These perma-lancers made us true contractors look bad, and I am convinced that they were the ones that drove the IR35 reform in the first place
A very grey area still and ‘perma’ lancers as you label them are not employees by any stretch of the imagination. They are entitled to no sick pay, no holiday pay, no pension contribs from the company, in fact no employer benefits atall and no safety net of redundancy or pay in lieu if they are given a tap on the shoulder and asked to finish up. That can happen at any time with very little warning.
IR35 has always been about control and those in the gestapo finance wing at HMRC making sure it is as un-attractive as possible for those considering freelancing or contract work as they have no control of taxing income at source as they do with full-time employment.