It is not IR35 which is causing the freelance sector to “flatline” but the worry of a no-deal Brexit which “would be disastrous for the freelance sector”, leading to freelancer’s confidence in both the economy and their own business to be low.
Joint research by the Association of Independent Professionals and the Self-Employed (IPSE) and PeoplePerHour, an online marketplace for freelancers, called the Confidence Index, shows assurance in their own sector plus the economy is down. As well as their pay decreasing since last year. The research found that the main reason for these negative attitudes towards business is down to Brexit.
Last year (2018) was positive for freelancer’s pay, however, the first three months of 2019 saw freelancer’s pay decrease by 17 per cent, with it still being around this mark.
In Q4 2018, freelancers were working on an assignment 79 per cent of the time with this dropping to 75 per cent in 2019.
Despite freelancer’s confidence in the economy actually rising it is still in the negative territory, as it rose from -36.3 to -27.4. Freelancer’s confidence in their own business in the short term rose from -0.7 to 3.5 but in the long term decreased from -6.1 to -6.7.
These findings are made worse by the fact that 70 per cent of freelancers predict their business costs will increase over the next year.
Ryan Barnett, IPSE’s economic policy advisor, said:
This quarter, we find a freelance sector that is flatlining in the face of Brexit. Back at the end of 2018, Brexit uncertainty gave freelancers a boost as it drove clients to them instead of taking the risk of hiring permanent staff. This quarter, however, we are clearly well past that phase.
The chaotic uncertainty of Brexit has now settled on freelancers. Confidence in business performance and in the wider economy is stuck in firmly negative territory. Pay, too, has dropped sharply from the Q4 2018 surge, as has the amount of work freelancers are getting.
The level of prolonged and profound uncertainty we are experiencing is uncharted and dangerous territory for freelancers. It’s led to the sector flatlining across a range of measures. But there is still a risk that things could get worse.
80 per cent of freelancers are opposed to a no-deal Brexit because they know the immense damage it could do to their businesses. What the freelance sector needs from government now, like the rest of business, is a way out of this chaos that does not lead to the disaster of a no-deal Brexit.
The Confidence Index was compiled by the responses of 955 IPSE and PeoplePerHour members who replied to an online survey.
However, at the end of last month (August 2019) it was found that the amount of UK workers wishing to become freelance had actually risen.